Bearish view
- Sell the BTC/USD pair and set a take-profit at 59,000.
- Add a stop-loss at 62,500.
- 1 day.
Bullish view
- Set a buy-stop at 61,500 and a take-profit at 63,500.
- Add a stop-loss at 59,000.
It was a sea of red in the cryptocurrency market as the countdown to the Bitcoin halving event continued. The BTC/USD dropped below the crucial support level at 60,000 for the first time since March 5th.
Bitcoin halving and ETF inflows slowing
The BTC/USD pair continued its strong sell-off even as the halving event neared. This halving will take place either on Friday or Saturday and will lead to the automatic reduction of the block rewards that are provided to miners.
It will have major implications in the long term. For example, it will likely take many inefficient miners out of business. Many mining companies will also see more depreciation among their older mining machines.
Bitcoin halving will also lead to a slowdown of the number of coins that are produced each day. The estimate is that the number will retreat from about 900 coins per day to about 450.
This is happening at a time when the number of Bitcoins in exchanges has dropped to the lowest level in months. Many people and companies, including Bitcoin ETF custodians, have moved their coins to cold storage.
Bitcoin’s price action is likely because investors are selling the halving news after they pumped it to an all-time high.
Bitcoin has also pulled back because of the slowing inflows in spot ETFs like IBIT, FBTC, and ARKB have dropped recently. The iShares Bitcoin Trust’s assets stand at $18 billion, where they have been in the past few weeks.
At the same time, there are signs that some investors are moving from Bitcoin ETFs to gold funds as the price of gold surges. Gold has moved to a record high of over $2,300 and analysts at Citi believe that it could move to $3,000.
BTC/USD technical analysis
The BTC/USD pair has retreated sharply in the past few days. It has formed a triple-top pattern and has now crashed below its neckline at 60,785. The pair has remained below the 50-day moving average in the past three straight days.
Further, the Relative Vigor Index (RVI) has formed a bearish divergence pattern. It has also moved below the neutral point. The same is true with the Percentage Price Oscillator (PPO) has crashed below the neutral point.
Therefore, the outlook for the BTC/USD pair will likely continue falling as sellers target the key support at 59,000.
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