Bearish view
- Sell the BTC/USD pair and set a take-profit at 59,000.
- Add a stop-loss at 65,000.
- Timeline: 1-2 days.
Bullish view
- Buy the BTC/USD pair and set a take-profit at 65,000.
- Add a stop-loss at 60,000.
The BTC/USD pair remained under pressure as the US dollar rally continued. The pair retreated to 62,800 on Tuesday morning, erasing some of the gains it made on Monday. It remains much lower than the year-to-date high of 73,845.
US dollar index rally
Bitcoin is under significant strain at a time when the US dollar has bounced back sharply. The US dollar index (DXY) has jumped to $106.20, its highest swing since November last year. It has jumped by over 6% from its lowest point this year.
The dollar has jumped because of the rising expectation that the Federal Reserve will not cut interest rates at a faster pace than expected. That’s because economic numbers from the US showed that inflation has remained stubbornly high.
Inflation trends may continue rising in the coming weeks as geopolitical risks in the Middle East continue. Most market participants are waiting for Israel’s response after Iran attacked it during the weekend.
Bitcoin tends to underperform in periods when the US dollar is rising because it is one of the riskiest assets in the market. The dollar and gold are often seen as safe havens.
The BTC/USD pair reacted mildly to an important development from Hong Kong, where authorities approved Bitcoin and Ethereum ETFs. Analysts believe that these ETFs will become popular among Chinese investors seeking to diversify from the stock market.
An ETF is different from the real Bitcoin, which has been banned in China since 2021. Therefore, there is a likelihood that billions of dollars will flow to these funds, especially among investors without access to American stocks.
Bitcoin ETFs have been popular in the United States, with the ones by Blackrock and Fidelity having over $10 billion in assets. Altogether, it is estimated that all spot Bitcoin ETFs have over $60 billion in assets.
BTC/USD forecast
The BTC/USD pair has remained under pressure in the past few days as the US dollar index jumped. It retreated to a low of 60,985 on Saturday and then rebounded to above 65,000 on Monday. It has now retreated and is nearing the crucial support level at 60,985, its lowest swing on Saturday.
Bitcoin has moved below the 25-day and 50-day Exponential Moving Averages (EMA). At the same time, the Relative Strength Index (RSI) has continued falling and has crashed below the neutral point at 50.
Therefore, the outlook for the pair is bearish, with the next point to watch will be at 59,000. This retreat will be confirmed if it moves below the key support at 60,985.
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