Bearish view
- Sell the BTC/USD pair and set a take-profit at 80,000.
- Add a stop-loss at 90,000.
- Timeline: 1-3 days.
Bullish view
- Buy the BTC/USD pair and set a take-profit at 90,000.
- Add a stop-loss at 80,000.
Bitcoin held steady above $85,000 as the market focused on the latest news on tariffs from the United States. The BTC/USD pair was trading at 85,000 on Tuesday morning, much higher than the year-to-date low of $74,500. It remains much lower than the year-to-date high of $109,205.
Bitcoin rises on tariff relief hopes
Bitcoin’s rebound coincided with the ongoing recovery of the stock market, with the Nasdaq 100 and S&P 500 indices soaring by over 300 points each. The VIX index and the US dollar index remained under pressure as risks eased.
The ongoing recovery happened after Donald Trump showed flexibility on his tariff stance. Last week, he paused tariffs on goods from over 70 countries, while leaving the baseline 10% intact.
The latest news was that the US will exclude some technology items from these tariffs. These include smartphone and other devices, including semiconductors, a sign that the administration is flexible.
Still, there are signs that the downtrend may continue as demand from Wall Street investors is still weak. Recent data shows that all spot ETFs have lost millions of assets in the past few weeks, a trend that may continue.
More data shows that futures open interest of Bitcoin in the crypto market remains weak, a sign that demand is still tepid.
A potential catalyst for Bitcoin and other risky assets is that the Federal Reserve may intervene if the economic slowdown continues. In a statement on Monday, Christopher Waller, a top Fed official noted that the bank would be prepared to intervene if Trump returns the large reciprocal tariffs after his 90-day pause.
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Waller’s statement mirrored that of Susan Collins, another Fed official, who told the Financial Times that the bank was prepared to cut rates if the economic weakness continued.
BTC/USD technical analysis
The daily chart shows that the BTC/USD pair has been in a strong bearish trend in the past few months. It moved from a high of 109,205 earlier this year to the current 85,000. It has also moved below the 50-day and 100-day moving averages, a sign that bears are in control.
The pair remains at the bottom of the trading range of the Murrey Math Lines, a popular tool for identifying support and resistance levels. Therefore, the most likely scenario is where it drops and retests the support at 70,000. A move above the major S/R level at 87,500 will invalidate the bullish view.
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