Bearish View
- Sell BTC/USD pair and set profit taking at 91,000.
- Add stop-loss to 101,000.
- Time frame: 1-2 days.
Bullish Pattern
- Buy the BTC/USD pair and set your take profit at 101,000.
- Add stop-loss at 91,000.
The BTC/USD pair moved sideways on Monday morning, as the path to the psychological point of 100,000 remained elusive. Bitcoin was trading at $98,000, about 7.4% higher than the December 30 low.
The BTC/USD pair gradually rose even as the US Dollar Index (DXY) continued its strong uptrend to hit a multi-year high of $109.51. In most periods, US dollar-denominated assets underperform when they are in strong growth.
Bitcoin’s volatility also occurred as spot Bitcoin ETFs continued to see increased demand. These funds had a net inflow of $908 million on Friday, the largest increase in months. They now own over $111 billion in assets, a number that will continue to grow over the next few months.
Bitcoin had other positive catalysts. For example, the popular Coinbase Premium Index bounced back after falling to a 12-month low last week. This is an important index that compares the price of Bitcoin traded on Coinbase and other exchanges.
A higher figure is usually a sign that US investors are buying Bitcoin as most of them use Coinbase, the country’s largest exchange.
Meanwhile, the volume of Bitcoin on the exchange continued to decline, a sign that investors are holding onto the coin.
Looking ahead, the next key catalyst to watch will be the upcoming economic data from the United States. The most important data to watch will be the upcoming US economic payrolls (NFP) data.
BTC/USD Technical Analysis
The daily chart shows that the price of Bitcoin peaked at $108,300 in December and then retreated to around $91,400. It has remained consistently above the 50-day moving average, a sign that the bulls are in control for now.
However, there are signs that the coin formed a head and shoulders pattern. This is one of the most bearish patterns in the market. The cut of this sample is around $91,400.
Also, the relative strength index (RSI) and MACD indicators have formed a bearish divergence diagram.
Therefore, the pair is likely to have a bearish breakout in the next few days as long as it remains below the $100,000 resistance. If that happens, the next point to watch will be $91,000.
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