Bullish view
Buy the BTC/USD pair and set a take-profit at 65,000.
Add a stop-loss at 55,000.
Timeline: 1-2 days.
Bearish view
Sell the BTC/USD pair and set a take-profit at 55,000.
Add a stop-loss at 65,000.
Bitcoin price retreated below the important support level of $60,000 for the first time since June 5 this year. The BTC/USD pair was trading at 59,828 as ETF outflows continued and as concerns about Michael Saylor’s Strategy continued.
Bitcoin ETF Outflows, STRC Retreat, and US Dollar Strength
The BTC/USD pair has slumped in the past few days as investors have continued selling their spot ETF holdings. Data shows that these ETFs shed over $2.4 billion this month, adding to the $2.4 billion they lost in May. BlackRock’s IBIT ETF has had the most outflows during the ongoing sell-off.
A likely reason for this is that these investors are rotating to the booming stock market, where the top indices are all trading at their all-time highs. Stock ETF inflows have jumped to a record high, with the Vanguard S&P 500 Index adding over $130 billion in assets this year.
The BTC/USD pair also dropped amid concerns that Michael Saylor’s Strategy may be forced to sell some its Bitcoin holdings to cover its dividends. Its STRC stock has lost its $100 peg and continued moving downwards. Strategy holds $1.4 billion in cash, lower than the annual dividend needs for $1.7 billion.
Bitcoin has also dropped because of the ongoing US Dollar Index (DXY) surge. The US Dollar Index jumped to $101.3, its highest level in over a year after the Federal Reserve hinted that it will hike interest rates if inflation continues rising.
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Analysts expect the bank to deliver one rate hike this year since inflation has remained above the 2% target for five years. The next key data to watch will be the US PCE and GDP data, which will come out later today.
BTC/USD Technical Analysis
The BTC/USD pair has been in a downward trend in the past few days, moving from a high of 67,237 on June 15. It has remained below the 50-day moving average, a sign that bears are in control.
On the positive side, there are signs that the pair has formed a double-bottom pattern at 59,260 and a neckline at 67,237, its highest point on June 15. This is one of the most common bullish reversal signs.
Therefore, the pair will likely rebound in the coming days, potentially to the psychological level of 65,000. A move below the support of 58,000 will invalidate the bearish outlook.
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