The BTC/USD pair has been in a strong bullish trend in the past few days.
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- Buy the BTC/USD pair and set a take-profit at 27,420.
- Add a stop-loss at 26,000.
- Timeline: 1 day.
- Set a sell-stop at 26,500 and a take-profit at 25,000.
- Add a stop-loss at 27,500.
Bitcoin price rose to a high of $27,420 on Monday as cryptocurrencies bounced back. The BTC/USD pair then pared back some of those gains and was trading at 26,900. In all, it has risen by almost 8% from the lowest level this month.
Federal Reserve decision ahead
Bitcoin continued its recovery as investors repositioned for the upcoming Fed interest rate decision. Economists polled by Reuters expect the Federal Reserve will decide to pause its interest rates at 5.50%.
The pause will be necessary because of the current state of the American economy. Data published last week showed that the country’s inflation continued rising in August as gasoline prices jumped.
The United Auto Workers (UAW) has called for the biggest strike in the auto industry in decades. Workers at key plants owned by General Motors, Stellantis, and Ford have gone to a strike that analysts believe will go on for a while.
At the same time, millions of Americans will start paying back their student loans at the end of the month. The average loan payment will be between $200 and $300 per month, which will likely affect consumer spending.
Further, a long traffic jam is happening at the Panama Canal, which could affect the economy. Most American imports move through the canal. Therefore, there is a likelihood that inflation will continue rising. A decision to pause rate hikes will be bullish for the BTC/USD pair.
Bitcoin price also rose even as the US dollar index (DXY) and crude oil prices jumped. The US dollar index jumped above $105 while Brent soared to $94. Analysts believe that Brent will hit $100 a barrel in the coming weeks.
BTC/USD technical analysis
The BTC/USD pair has been in a strong bullish trend in the past few days. This recovery saw it jump from below $25,000 on Monday to over 27,420, the highest level since August 31st. It has risen above the 25-period and 50-period moving averages. It is also approaching the 50% Fibonacci Retracement level.
Bitcoin has also formed an inverted head and shoulders pattern. Therefore, there is a likelihood that the BTC/USD pair will continue rising as buyers target this week’s high of 27,420.