Bearish view
Sell the BTC/USD pair and set a take-profit at 70,000.
Add a stop-loss at 81,000.
Timeline: 1-2 days.
Bullish view
Buy the BTC/USD pair and set a take-profit at 81,000.
Add a stop-loss at 70,000.
Bitcoin price was attempting to bounce back on Thursday morning as investors embraced a risk-on sentiment, and after it found a strong support at the 50-day moving average. The BTC/USD pair was trading at 77,520, up slightly from this week’s low of 76,000.
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Bitcoin Price Rises, But Risks Remain
The BTC/USD pair rose as investors embraced a risk-on sentiment after President Trump said that talks with Iran were in the final stages. His announcement sent the stock market higher and crude oil prices much lower, with the West Texas Intermediate (WTI) moving below $100.
Bitcoin would benefit if the war ended as it would lower inflation in the United States and raise the possibility that the Federal Reserve will cut interest rates this year.
Still, Trump’s statement should be taken with a grain of salt. For one, Iran has not confirmed that it was having any serious talks with the US. Also, Trump has always expressed hopes of reaching a deal with Iran, only to resume his threats.
Bitcoin faces some major risks ahead. The first major one is that American investors have continued to dump their Bitcoin ETF holdings. They have dumped ETFs worth over $1 billion in the past two weeks, erasing the inflows experienced in the first six days of the month.
There are also signs that Bitcoin treasury companies, other than Michael Saylor’s Strategy, have largely stopped accumulating these coins. Also, Bitcoin’s demand in the futures market has continued falling, with the open interest moving to the lowest point in weeks.
The other risk is that the US dollar index (DXY) has jumped to nearly $100, with the currency gaining against most currencies. Also, bond yields are hovering around the highest level in years.
BTC/USD Technical Analysis
The BTC/USD pair has pulled back in the past few days, moving from a high of 82,847 earlier this month to 75,940. Its lowest level this week was notable as it was alongside the 50-day Exponential Moving Average (EMA).
The pair has moved below the lower side of the rising wedge pattern, which is made up of two ascending and converging trendlines. It is a common bearish reversal sign.
Bitcoin has also moved below the Strong Pivot Reverse of the Murrey Math Lines tool. Therefore, the most likely scenario is where the BTC/USD pair continues falling, potentially to the key support at 70,000.