Bullish View
Buy the BTC/USD and add a take-profit at 60,000.
Add a stop-loss at 54,000.
Timeline: 1-3 days.
Bearish View
Set a sell-stop at 54,500 and a take-profit at 50,000.
Add a stop-loss at 56,000.
The BTC/USD pair was in a tight range during the overnight session even after a relatively hawkish Federal Reserve chair. It also reacted mildly to news that MicroStrategy had acquired additional Bitcoins.
Federal Reserve Hawkish
Jerome Powell and Janet Yellen testified before Congress on Tuesday about the new CARES act. In his statement, Powell warned about the risks posed by the new variant of Covid-19. He argued that it will lead to more demand and higher prices.
As a result, he hinted that the Fed will wind down its quantitative easing policy at a faster pace than expected. This statement pushed the US Dollar Index substantially high. It also led to a sharp decline in US equities, with the Dow Jones shedding more than 500 points. The Nasdaq 100 index declined by more than 255 points.
The BTC/USD pair remained steady after MicroStrategy announced that it had acquired additional Bitcoin worth more than $400 million. The new tranche was acquired at the average price of $59,187.
This makes the company one of the biggest holders of Bitcoin. It owns 121,044 Bitcoins, which had an average purchase price of $29,000. This means that the company’s crypto holdings are highly profitable. This success could see more companies acquire some Bitcoins in the coming months.
At the same time, there is rising optimism about the industry. For example, in an announcement, Galaxy Digital announced that it was seeking to rais $500 million through the sale of convertible bonds. The notes will have a yield of about 3% and are set to mature in 2026. The firm plans to use these funds to expand its business by moving into Bitcoin mining. Two weeks ago, it reported a net income of more than $517 million.
BTC/USD Forecast
The BTC/USD found a strong support at 53,320 in November this year. It struggled moving below this level several times during the month. It is now trading at 57,000, which is about 7% above the lowest level in November.
The pair is trading at the 25-day and 50-day moving averages. It has also moved slightly below the 38.2% Fibonacci retracement level. The MACD has also moved above the neutral level. It seems like it has formed a small inverted head and shoulders pattern. Therefore, the pair will likely bounce back as bulls target the key resistance at 60,000.
