Bearish view
- Sell the BTC/USD pair and set a take-profit at 19,400.
- Add a stop-loss at 21,000.
- Timeline: 1-2 days.
Bullish view
- Set a buy-stop at 20,480 and a take-profit at 21,500.
- Add a stop-loss at 19,500.
The BTC/USD pair retreated slightly after the latest interest rate decision by the Fed. It dropped to a low of 20,100, which was the lowest level since October 28. This price is slightly lower than last week’s high of 21,100.
Bitcoin momentum stalls
Bitcoin and other cryptocurrencies moved sideways shortly after the Fed made its decision. In it, the bank decided to deliver a jumbo rate hike in a bid to contain the stubbornly high inflation. It hiked by 0.75% for the fourth meeting straight and pushed rates to 4%.
Bitcoin then edged lower after Jerome Powell delivered his press conference in which he insisted that the bank will continue hiking rates. Investors now expect that the Fed will hike rates by 0.50% in its December meeting.
The Fed also insisted that it will likely start lowering the pace of rate hikes in the coming months. Still, Powell insisted that the bank will maintain high interest rates in the near term in a bid to pull down inflation.
The next key data to watch will be the latest jobs numbers. All indications are that the American economy created more jobs in October. On Tuesday, data showed that the number of job vacancies rose sharply in October.
Additional data by ADP showed that the private sector added over 239k jobs in October. The US will publish the non-farm payrolls (NFP) on Friday.
The BTC/USD price decline coincided with the strong US dollar and the falling American stocks. The US dollar index rose by 50 basis points to $111.90, which was higher than last month’s low of $109. Meanwhile, the Dow Jones declined by more than 500 points while the Nasdaq 100 index slipped by over 366 points or 3.35%.
BTC/USD forecast
The four-hour chart shows that the BTC/USD pair has been in a bearish trend in the past few days. It has struggled to move above last week’s high of 21,000. The pair has dropped below the 50-day EMA while the Relative Strength Index (RSI) has formed a bearish divergence pattern. It has also formed a small double-top pattern.
Therefore, the pair will likely continue falling as sellers target the next key support level at 19,500. A move above the resistance at 20,500 will invalidate the bearish view.
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