Bearish view
Sell the BTC/USD pair and set a take-profit at 55,000.
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 55,000.
The BTC/USD pair retreated overnight as the stock and crypto markets dropped amid the rising risks. Bitcoin dropped to $61,000, continuing a downtrend that started in May when it peaked at $82,607.
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Bitcoin Slumps as Key Market Risks Rise
The BTC/USD pair dropped as risks rose, which affected the state of the broader financial market. For example, US stock slumped, with the Nasdaq 100 Index falling by over 1.75% and the S&P 500 crashing by over 1%. Semiconductor companies like Marvell Technology, Lumentum, Arm Holdings, Qualcomm, and AMD were among the top laggards.
One of the top risks the market is contending with is the rising probability that the Federal Reserve will deliver at least two interest rate hikes this year. These risks rose after the US released strong non-farm payrolls (NFP) data. This report showed that the economy created over 172k jobs in May, much higher than what analysts were expecting.
Bitcoin is also falling as American investors continue to dump their ETFs. These funds have lost over $4 billion in assets in the last four consecutive weeks, erasing the gains they made in March and April this year.
These outflows are likely happening as investors capitulate since Bitcoin has underperformed the market in the past two years. Some investors are likely selling their ETFs to generate capital to invest in the upcoming SpaceX IPO, which will happen on Friday.
The BTC price is also falling amid a sense of fear in the crypto market. Data shows that the Crypto Fear and Greed Index has dropped to the extreme fear zone of 11. In most cases, investors normally stay in the sidelines when there is a sense of fear in the market.
BTC/USD Technical Analysis
The daily chart shows that the Bitcoin price has pulled back in the past few days, moving from $82,607 to the current 61,765. It retreated to 59,800 during the weekend and then attempted to rebound. This recovery was a dead-cat bounce, a temporary rebound that results into a downtrend.
The pair has moved below the Ultimate Support level of the Murrey Math Lines tool at 62,500. It has retreated below all moving averages, while the Relative Strength Index (RSI) has continued falling.
Therefore, the pair will likely continue falling, potentially to the key support level at 55,000. A move above the strong, pivot, reverse level of the Murrey Math Lines will invalidate the bearish outlook.
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