Bearish view
- Sell the BTC/USD pair and set a take-profit at 105,000.
- Add a stop-loss at 118,000.
- Timeline: 1-2 days.
Bullish view
- Buy the BTC/USD pair and set a take-profit at 118,000.
- Add a stop-loss at 105,000.
Bitcoin price pulled back as investors embraced a risk-off sentiment in the market. The BTC/USD pair dropped to a low of 113,120, its lowest level since August 5. It has tumbled by almost 10% from its highest point this year.
Bitcoin’s plunge happened as data showed that spot BTC ETFs had outflows for three consecutive days, the longest streak in over two weeks. All ETFs have now had a cumulative total of $54 billion, with BlackRock’s IBIT ETF having over $87 billion in assets under management.
Bitcoin’s decline also coincided with the plunge in the stock and crypto market. The Nasdaq 100 Index dropped by 1.4%, with NVIDIA leading the losses. Similarly, the S&P 500 and Dow Jones fell by more than 1% in their worst day since April when Donald Trump unveiled his tariffs against all countries.
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Bitcoin and the stock market are waiting for the upcoming Federal Reserve minutes and Jerome Powell's statement at the Jackson Hole Symposium in Wyoming. Market participants are predicting that the Fed will cut interested rates by 0.25% in this meeting, even as recent data showed that inflation was still a major challenge.
Bitcoin also retreated as investors booked profits after a strong surge that pushed it to a record high last week.
BTC/USD Technical Analysis
The daily chart shows that the BTC/USD pair peaked at 124,200 last week as the bullish trend accelerated. It then formed the highly bearish double-top chart pattern with a neckline at 112,000.
A double-top often leads to more downside, with the profit target estimated by first measuring the height and then the same distance from the neckline. In this case, the pair will likely continue falling, potentially to the support at 102,060.
On the flip side, a move above the resistance at 120,000 will invalidate the bearish outlook and point to more gains, potentially to the all-time high of 124,200.
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