Bullish view
- Buy BTC/USD pair and set profit taking to 100,000.
- Add stop-loss at 91,000.
- Time frame: 1-2 days.
Bear’s gaze
- Sell BTC/USD pair and set profit taking at 89,000.
- Add stop-loss to 100,000.
Bitcoin price has fallen to a key support level as it continued to form mixed chart patterns during the recent downtrend. The BTC/USD pair fell to a low of $92,590, down 15% from its all-time high.
Bitcoin’s pullback occurred as some investors took profits as bond yields jumped to their highest levels in nearly 2 years. The 30-year yield moved to 4.95%, while the 10-year and 5-year yields were at 4.7% and 4.46%, respectively.
These yields have risen steadily as investors remain concerned about the pace of Federal Reserve tapering this year. Analysts expect this pace to be significantly slower than expected due to the stubbornly high inflation rate. The main consumer price index (CPI) has remained above 2% in recent months.
Minutes released Thursday showed most officials expect the Fed to make at least two more cuts this year.
On the positive side, there are signs that inventors are buying the recent dip. Exchange-traded funds (ETFs) had inflows for three consecutive days. They added $908 million in assets on Friday, $987 million on Monday and $52 million on Tuesday, a sign that Wall Street is buying the dip. These ETFs now hold $110 billion worth of coins, equivalent to 5.76% of the Bitcoin market cap.
BTC/USD Technical Analysis
The daily chart shows that the BTC/USD pair has been in a tight range for the past few weeks as it is still in the price discovery phase. It remained above the 50-day moving average, which provided significant support.
On the downside, Bitcoin formed a head and shoulders chart pattern, which is often a bearish sign of a reversal. The cut of this pattern ties the swing lows since November 26 last year.
However, there are signs that it formed a bullish flag pattern with a long vertical line and a rectangle formation. This is one of the most positive signs in the financial market. On top of that, he formed a small hammer pattern with a long shadow and a small body.
Therefore, there are signs that Bitcoin has bottomed as long as it is above the 50-day moving average and the underside of the flag. If this happens, it will return to the upper side of the channel, which is above 100,000. A break below the support could lead to a drop to the 100-day MA at 87.235.
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