If bulls can stay comfortably above 56,422, there is a likelihood that the price will bounce back above 60,000.
Set a sell-stop at 55,200 and a take-profit at 53,000.
Add a stop-loss at 57,000.
Timeline: 1-2 days.
Set a buy-stop at 58,000 and a take-profit at 60,000.
Add a stop-loss at 56,000.
The BTC/USD pair has been under pressure in the past few days as investors brace for more supplies as Mt. Gox victims start receiving their payments. The pair is trading at 57,497, which is about 17% below its highest level this month. It is a few points above the lowest level this year.
Mt. Gox Distribution
Mt. Gox was once the biggest Bitcoin exchange in the world until it was shut down in 2017. Customers of the Japanese company lost more than 850,000 Bitcoins. At the time, these coins were worth more than $450 million. Since then, about 200,000 Bitcoins have been recovered.
Now, victims of the rest of the coins are expected to be compensated in a deal that could see more coins flood the market. Like in all other assets, the price of Bitcoin is usually influenced by demand and supply dynamics.
The BTC/USD pair has also declined because of the overall strong dollar. In the past few weeks, the US Dollar Index has surged to the highest level in more than a year. This is primarily because analysts expect that the Fed will embrace a more aggressive stance to deal with inflation.
At the same time, Bitcoin has dropped as demand for inflation hedges has dropped. Gold, which is one of the oldest hedges of inflation, has dropped by more than 5% in the past few days. The decline happened after the US and other countries launched a plan to boost oil supplies with oil reserves. The government hopes that this will help to lower gasoline prices.
Looking ahead, the BTC/USD will likely react to US GDP and durable goods order numbers. These numbers could have an influence on Fed’s tightening.
The BTC/USD pair is attempting to rebound after falling sharply in the past few days. The pair is trading at 57,497, which is about 4% above the lowest level this week. The price is also slightly above the important support level at 56,422, which was the lowest level on October 28. It has also formed a double-bottom pattern whose upper side is at 59,885.
Therefore, if bulls can stay comfortably above 56,422, there is a likelihood that the price will bounce back above 60,000. On the other hand, a drop below the support at 55,000 will signal that there are still more sellers in the market.