The pair will likely have a bullish breakout this week as investors target the next key resistance point at 26,000.
- Buy the BTC/USD pair and set a take-profit at 26,000.
- Add a stop-loss at 23,000.
- Timeline: 1-2 days.
- Set a sell-stop at 23,500 and a take-profit at 22,000.
- Add a stop-loss at 25,000.
The BTC/USD price moved solidly above the resistance point at 24,000 as sentiment in the market improved. It rose to a high of 24,955, which was the highest level since June 13th of this year, meaning that it has recovered by about 40% from its lowest level this year.
Market Sentiment Improving
The BTC/USD pair continued its recovery as investors focused on corporate earnings and the falling American consumer and producer inflation.
On Wednesday, data published by the American government showed that the country’s consumer inflation dropped from 9.1% in June to 8.7% in July. In the same period, the producer price index (PPI) declined sharply as the cost of fuel pulled back.
These numbers showed that the Federal Reserve will likely slow its rate hiking cycle in the coming months. Still, most Fed officials who have talked after the data came out insisted that the bank will likely continue tightening in the coming months. They noted that inflation remains substantially above the Fed’s target of 2.0%.
The BTC/USD price also rose as the US dollar index retreated from its highest point this year. The dollar index retreated from the year-to-date high of $109.30 to about $106. This performance was mostly because of the performance of US inflation.
Meanwhile, it seems like investors are getting greedy. The fear and greed index that is tracked by CNN Money closed at 55 on Friday. This price is a few points below the greed level of 50 but it is substantially above its lowest level this year. As a result, the main American indices like the Dow Jones, Nasdaq 100, and S&P 500 have moved to a bull market.,
On the other hand, Bitcoin’s fear and greed index rose to 50, which was higher than last month’s low of 15.
The four-hour chart shows that the BTC/USD price has been in a slow upward trend in the past few weeks. Along the way, the pair formed an ascending triangle pattern that is shown in purple. This triangle is usually a bullish sign. It has also remained above the 25-day and 50-day moving averages while the Stochastic Oscillator has moved slightly below the overbought level.
Therefore, the pair will likely have a bullish breakout this week as investors target the next key resistance point at 26,000.