Bullish view
Buy the BTC/USD pair and set a take-profit at 70,000.
Add a stop-loss at 60,000.
Timeline: 1-2 days.
Bearish view
Sell the BTC/USD pair and set a take-profit at 60,000.
Add a stop-loss at 70,000.
Bitcoin price rose slightly and crossed the important resistance of $65,000 as traders embraced a risk-on sentiment after the weak US inflation report. The BTC/USD pair was trading at $64,920 on Thursday, up by 12% from its lowest point in June.
Risk-On Sentiment Despite US-Iran War
Bitcoin and other risky assets jumped as investors ignored the ongoing Iran-US war that has pushed crude oil prices higher. Brent, the global benchmark, jumped to $85, up by 20% from its lowest level this month.
There is a risk that the war will continue in the coming weeks as the path out of the current situation appears narrow. As a result, the risk is that soaring crude oil and shipping costs will continue rising in the near future.
The other risk is that Ukraine has continued attacking Russian ships and other critical infrastructure. All this is happening a time when crude oil inventories have continued falling in the past few months. As a result, there is a risk that oil prices will continue rising in the coming weeks.
Such a move will push inflation higher, reversing the declines experienced in June. Data released on Tuesday showed that the headline Consumer Price Index (CPI) data dropped from 4.2% in May to 3.5% in June. Core inflation also retreated.
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Another report showed that the headline Producer Price Index (PPI) data dropped from 6.0% in May to 5.5% in June, missing the estimated 6.2%. These numbers explain why the US dollar index dropped for two consecutive days. US equities also continued rising.
Bitcoin also benefited from the rising inflows in the past two consecutive days, a sign that American investors are starting to buy. Also, the Crypto Fear and Greed Index rose from the extreme fear zone of 16 to the neutral point of 40.
BTC/USD Technical Analysis
The daily chart shows that the BTC/USD pair has bounced back from this month’s low of 57,724 to a high of 65,000. It has rebounded above the 25-day Exponential Moving Average (EMA).
The pair has formed an inverted head-and-shoulders pattern, while the Relative Strength Index (RSI) moved above the neutral level of 50. It is pointing upwards and is hovering at the highest point since May 15.
Therefore, the pair will likely continue rising, potentially to the next key resistance level of 70,000. A drop below the support level of 61,700 will invalidate the bullish outlook.
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