BTC/USD Forex Signal: Jitters as Bitcoin Recovery Fades

The BTC/USD price declined after a series of strong American economic data pointed to more rate hikes by the Fed. 

Bearish view

  • Sell the BTC/USD pair and set a take-profit at 16,200.
  • Add a stop-loss at 17,500.
  • Timeline: 1 day.

Bullish view

  • Buy the BTC/USD pair and set a take-profit at 18,000.
  • Add a stop-loss at 16,000.

The BTC/USD price pulled back in the overnight session as investors embraced a risk-off sentiment. Bitcoin dropped from this week’s high of $17,395 to about $17,000. It remains in a narrow range that started last week.

Strong economic data cause panic

The BTC/USD price declined after a series of strong American economic data pointed to more rate hikes by the Fed. On Friday, data published by the Bureau of Labor Statistics (BLS) revealed that the economy added more jobs than analysts were expecting. Precisely, the economy added over 280k jobs, meaning that the economy has added an average of 250k jobs in the past three months.

On Monday, data showed that the American non-manufacturing PMI increased slightly in November. Therefore, analysts expect that the bank could be more hawkish than expected. It will likely hike by 50 basis points in December and then push them above 5% in 2023.

On a positive note, recent data suggests that inflation has eased. In November, the headline consumer price index (CPI) dropped from 8.3% in September to 7.7% in October. And analysts expect that prices dropped in November as gasoline prices have plunged.

The national average price of gasoline in the US dropped to $3.40, the lowest level in more than a year. Natural gas prices plunged by over 10% while lumber prices fell to the lowest point since 2020. Falling inflation could see the Fed raise rates at a slow pace.

Bitcoin’s decline coincided with a sharp decline of American stocks. The Dow Jones erased over 500 points of value while the Nasdaq 100 and S&P 500 dropped by over 2.50%. Net bearish positions tied to the stock market futures jumped to their highest point in a decade. Stocks tend to have a close correlation with Bitcoin.

BTC/USD forecast

The BTC/USD price continued falling as investors focused on the strong American economic numbers. It dropped to a low of 17,000, which was lower than this week’s high of 17,412. This price is slightly above the standard pivot point.

The pair is also trading at the 50-day moving average and is close to the neckline of the double-top pattern. At the same time, oscillators like the Relative Strength Index have all retreated. Bitcoin will likely continue falling, with the next key support level being at 16,200.

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Crispus Nyaga
Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.

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