Bearish view
- Sell the BTC/USD pair and set a take-profit at 98,000.
- Add a stop-loss at 107,028.
- Timeline: 1-2 days.
Bullish view
- Buy the BTC/USD pair and set a take-profit at 107,208.
- Add a stop-loss at 98,000.
Bitcoin price continued its strong downtrend this week and is now hovering slightly above the key support at $100,000. The BTC/USD pair was trading at 101,900, much lower than the year-to-date high of 126,500. It is hovering near its lowest level since June this year.
Bitcoin has sold off for several reasons. First, it remains under pressure as its demand in the futures market has waned. Data shows that the daily futures open interest has dropped to $63 billion from the October high of $95 billion.
Bitcoin has also pulled back as exchange-traded funds (ETF) inflows have slowed dramatically the past few weeks. Data hows that Bitcoin ETFs shed over $1 billion in assets last week, a sign of weak demand among institutional investors.
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Meanwhile, recent data show that Digital Asset Treasury (DAT) companies are not buying as much Bitcoin as they did a few months ago as their stock prices have plunged, sinking their net asset value multiples.
It has also dropped in line with the performance of the stock market, where top American indices like the S&P 500 and Nasdaq 100 have all retreated in the past few days amid jitters in the artificial intelligence industry.
Still, Bitcoin has potential catalysts, including the end of the government shutdown and the fact that the Federal Reserve may continue cutting interest rates this year.
BTC/USD Technical Analysis
The daily timeframe chart shows that the BTC/USD pair has been in a strong downward trend in the past few months, moving from a high of 126,300 to the current 101,000.
It has recently moved below the 50-day Exponential Moving Average (EMA) and the key support level at 107,000, the neckline of the double-top pattern at 125,137. A double-top is one of the most popular bearish patterns in technical analysis.
The BTC/USD pair has moved below the Supertrend indicator and the Ichimoku cloud, a sign that bears are in control. Also, the Percentage Price Oscillator (PPO) and the Relative Strength Index (RSI) have continued moving downwards.
Therefore, the most likely scenario is where the BTC/USD pair continues falling as sellers target the next key support level at 98,000, its lowest level in October this year. A move below that level will point to more downside. On the flip side, a move above 107,028 will invalidate the bearish outlook.
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