Bullish View
- Buy the BTC/USD pair and set a take-profit at 21,000.
- Add a stop-loss at 18,000.
- Timeline: 1 day.
Bearish View
- Sell the BTC/USD pair and set a take-profit at 17,800.
- Add a stop-loss at 21,000.
The BTC/USD pair moved sideways as concerns about the health of the cryptocurrency industry continued. Bitcoin is hovering around $20,200 where it has been in the past few days. This price is slightly above last month’s low of $17,623.
Concerns About Cryptocurrencies
There are rising concerns about the cryptocurrency industry. In May this year, Terra’s ecosystem disappeared, costing investors over $40 billion. In June, Celsius, a company that operated as a crypto bank suspended withdrawals and swaps in a bid to prevent a bank run.
Similarly, BlockFi, which was once a market leader in the industry came under intense pressure. As a result, FTX is said to be buying the firm for about $25 million. As part of the agreement, FTX will provide $250 million in liquidity for the company.
Meanwhile, more exchanges are suspending withdrawals. During the weekend, Voyager Digital, a Canadian exchange announced that it was pausing withdrawals and deposits. This happened since the company was the most affected by the recent collapse of Three Arrows Capital.
The most recent company to suspend withdrawals, trading, and deposits is Vauld, a company that is backed by Coinbase and Peter Thiel. The firm said that it was suspending operations in a bid to prevent a bank run after users withdrew $200 million in the past three weeks. The firm is now engaging financial and legal advisors to explore all options.
The BTC/USD pair is consolidating as investors worry about the lack of demand for cryptocurrencies. While some existing holders like MicroStrategy are buying the dip, there are currently very few new buyers.
As a result, it could take time for the BTC/USD pair to stage a strong recovery considering that the Federal Reserve is still tightening.
BTC/USD Forecast
The four-hour chart shows that the BTC/USD pair has been in a tight range in the past few days. The pair has managed to bounce back from last week’s low of 18,750 to about 20,000. It has moved slightly above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has pointed upwards. The RSI is above the neutral point at 50 and the moving average shown in yellow.
Therefore, the pair will likely remain in this range as investors wait for the reopening of American markets. In case of more upside, the next key resistance point to watch will be at 21,000.
