Bearish View
Sell the BTC/USD and add a take-profit at 45,000.
Add a stop-loss at 52,000.
Timeline: 1-2 days.
Bullish View
Set a buy-stop at 52,000 and a take-profit at 55,000.
Add a stop-loss at 49,000.
The BTC/USD pair declined slightly as investors refocused on the upcoming US inflation data. Investors also reacted to the testimony by cryptocurrency CEOs in Capital Hill. The pair is trading at 49,875, which is slightly below this week’s high of 52,000.
Crypto CEOs Testimony
Many countries have taken different views on cryptocurrencies. For example, China has banned most cryptocurrency activities while India is creating rules that could ban them. In the United States, regulators like the Securities and Exchange Commission (SEC) and the CFTC have been studying the industry.
Many lawmakers have called on Congress to come up with strict regulations aimed at protecting consumers. It is in line with this that Congress convened a hearing from some of the leading players in the industry. Some of those who attended the session were CEOs of companies like FTX. Coinbase, and Circle.
The session was relatively positive, with most legislators and the companies themselves calling for regulations in the industry. Most analysts believe that regulations would be a win for cryptocurrencies since they would lead to more demand from institutional investors. The Senate Banking Committee will hold a session with stablecoin CEOs next week.
The BTC/USD also retreated after more data came up about the weekend’s crash. According to Glassnode, the crash led to the liquidation of futures contracts worth more than $5.4 billion. This was the second-largest single-day change in the futures market this year. The first one happened during the crypto sell-off in May. Analysts blamed the liquidation of these futures as being one of the reasons for the crash.
The next key catalyst for the BTC/USD pair will be the upcoming US inflation numbers scheduled for Friday. Analysts expect the data to show that the country’s inflation rose to 6.7% in November from 6.2% in the previous month. This will be the biggest number in decades.
BTC/USD Forecast
The four-hour chart shows that the BTC/USD strong recovery has faded in the past few days. The pair managed to rise from about 42,000 to 52,000 during the weekend. But it seems like it has found some significant resistance at the 38.2% Fibonacci retracement level.
The pair has also struggled moving above the 25-day and 50-day moving average (MA). A closer look also shows it has formed a bearish flag pattern. Therefore, there is a likelihood that the price will drop sharply in the coming days. This could see it retest the support at 45,000.
