Bearish view
- Sell the BTC/USD pair and set a take-profit at 85,000.
- Add a stop-loss at 90,000.
- Timeline: 1-2 days.
Bullish view
- Buy the GBP/USD pair and set a take-profit at 90,000.
- Add a stop-loss at 85,000.
Bitcoin price remained in a narrow range as the potential Santa Claus rally stalled. The BTC/USD pair was trading at 88,170, up by nearly 10% from the November low of 80,570. It remains much lower than the year-to-date high of 126,268.
BTC/USD Technical Analysis Suggests More Downside
The daily timeframe chart shows that the BTC/USD pair has remained in a tight range in the past few. It has slumped below the Supertrend indicator, a sign that bears have prevailed.
The pair has also dropped below the 50-day and 100-day Exponential Moving Averages (EMA). Most importantly, it is in the process of forming the risk bearish pennant pattern. It is now forming the triangle section of this pattern, meaning that a bearish breakout may happen soon.
The Percentage Price Oscillator (PPO) has continued moving sideways and is slightly below the zero line. Also, the Relative Strength Index (RSI) has dropped below the neutral point of 50.
Therefore, the most likely scenario is where the BTC/USD pair moves out of this consolidation and makes a bearish breakout.
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Such a move will point to more downside, potentially to last month's low of 80,650. On the other hand, a move above the upper side of the bearish pennant’s triangle at 94,030 will invalidate the bearish forecast.
Bitcoin Price is Facing Major Headwinds
Bitcoin price is facing major headwinds, including the ongoing selling by American ETF holders. Data compiled by SoSoValue shows that spot Bitcoin ETFs have shed billions of dollars in value in the past few months.
Bitcoin has also dropped as investors continue deleveraging, as evidenced by the falling open interest, which has moved from a high of $95 billion in October to the current $58 billion.
The funding rate has remained below the zero line, a sign that investors anticipate that the future price will be lower than the current level.
Meanwhile, the coin is struggling as investors wait for a big options expiry, which will happen on Friday this week. Options worth over $28 billion will expire, a move that will lead to more volatility in the crypto industry.
The BTC/USD pair will have no major catalyst this week as volume is expected to be low because of the Christmas holiday.
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