Bearish view
- Sell the BTC/USD pair and set a take-profit at 18,500.
- Add a stop-loss at 20,500.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 20,000 and a take-profit at 21,000.
- Add a stop-loss at 18,000.
The BTC/USD price continued consolidating on Monday as focus shifted to the upcoming American inflation data. It was trading at 19,522 on Monday, where it has been in the past few weeks. Bitcoin has crashed by almost 60% this year.
Bitcoin hash rate growth
Bitcoin has had a tough year in 2022 as the price has collapsed by almost 60%. This decline has invalidated the key claim that Bitcoin was a good hedge against inflation. Inflation has surged to the highest level in more than four decades.
Bitcoin is not alone. Often seen hedges against inflation have also worsened this year. For example, gold has been in a strong bearish trend this year. It has lost about 5% of its value and by 20% from the highest point this year.
The same is true for Treasury inflation-protected securities (TIPS). Inflation-protected bond tracked by the Intercontinental Exchange has dropped by 13.2% this year. In comparison, ICE’s loss for index of regular treasuries has dropped by about 13.5%.
The BTC/USD pressure continued last Friday when the US published strong jobs data. The data revealed that the American economy added over 250k jobs in September. While that was lower than this year’s monthly average, it still signals that the economy was doing well.
Therefore, analysts expect that the Federal Reserve will continue hiking interest rates in the coming months. As a result, it was a sea of red in America’s equities as the Dow Jones crashed by more than 600 points. The S&P 500 and Nasdaq 100 indices also declined. The same trend continued on Monday in the futures market.
Still, Bitcoin’ hash rate has continued rising and is now close to a record high. Analysts cite the falling mining rig prices, increased crypto-friendly jurisdictions, and the recent Ethereum merge for the rise.
BTC/USD forecast
The four-hour chart shows that the BTC/USD price has been in a tight range recently. It has remained around 20,000 in the past few weeks. Bitcoin is consolidating at the 25-day moving average while the MACD has moved below the neutral point. The Relative Strength Index (RSI) has moved below the neutral level of 50. It is also slightly above the ascending trendline shown in purple.
Therefore, Bitcoin will likely remain in the current range on Monday and then have a bearish breakout. If this happens, the next key level to watch will be at 18,500.
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