Bearish view
- Sell the BTC/USD pair and set a take-profit at 80,600.
- Add a stop-loss at 91,000.
- Timeline: 1-2 days.
Bullish view
- Buy the BTC/USD pair and set a take-profit at 91,000.
- Add a stop-loss at 80,600.
Bitcoin price made a strong bearish breakdown as the recent recovery faded ahead of key macro data and Bank of Japan interest rate decision. The BTC/USD pair dropped below the important support level at 85,000, reaching its lowest level since December 1.
Bitcoin Falls Ahead of Key Macro Events
The BTC/USD pair resumed its downward trend, erasing some of the gains made earlier this month as investors waited for the upcoming US jobs and inflation data and the important Bank of Japan (BoJ) interest rate decision.
It also dropped as investors embraced a risk-off sentiment in the market, with American stock indices like the Nasdaq 100 and S&P 500 indices falling by over 0.50%.
The decline happened as market participants placed their bets that the Bank of Japan will hike interest rates by 0.25% in the upcoming meeting. A hike will happen as the bank works to combat the elevated consumer inflation, which may keep rising as the country launches a new stimulus package.
Top Forex Brokers
The BTC/USD pair also dropped as investors remained fearful, with the Crypto Fear and Greed Index remaining in the fear zone of 28. Another good example of this is the ongoing deleveraging in the market as the futures open interest continues falling.
Its futures open interest has dropped to $130 billion from the October high of $255 billion, a sign that investors are fearful following the $20 billion wipeout that happened on October 10 this year. Falling open interest is a sign that investors are staying on the sidelines.
The next key catalyst for the pair will be the upcoming US non-farm payrolls (NFP) data
BTC/USD Technical Analysis
The daily timeframe chart shows that the BTC/USD pair has moved below the 50-day and 200-day Exponential Moving Averages (EMA), a sign that bears have prevailed.
It has moved below the lower side of the bearish flag pattern, one of the riskiest signs in technical analysis. It also remains below the Supertrend indicator, while the Relative Strength Index (RSI) and the MACD indicators have continued falling.
Therefore, the pair will likely continue falling as sellers target the next key support level at 80,000, its lowest level this year. A move below that level will point to more downside in the coming weeks, potentially to the April low of $74,000.
Ready to trade our daily Forex signals? Here’s a list of some of the best crypto brokers to check out.