Bearish view
- Sell the BTC/USD pair and set a take-profit at 60,000.
- Add a stop-loss at 71,000.
- Timeline: 1-2 days.
Bullish view
- Buy the BTC/USD pair and set a take-profit at 71,000.
- Add a stop-loss at 60,000.
Bitcoin continued its strong sell-off this week, reaching its lowest level since April 5 this year, even as the US stock market surged to a record high. The BTC/USD pair was trading at 67,600, much lower than last month’s high of 82,650. This sell-off may continue falling in the near term.
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Bitcoin Price Crash Gained Momentum
The BTC/USD pair has continued its strong sell-off this week amid signs that investors are capitulating as the US stock market crashes. Data compiled by SoSoValue shows that spot Bitcoin ETFs have shed over $700 million this month alone, continuing outflows that have been going on in the past few weeks.
These funds have continued seeing substantial redemptions, hitting over $3 billion in the past few weeks. That is a sign that investors are capitulating and moving to other better-performing assets, like the stock market, with the S&P 500, Dow Jones, and Nasdaq 100 soaring to a record high.
The stock market has surged in the past few months, helped by the strong corporate earnings. Data shows that corporate earnings grew by 28% in the first quarter, the fastest growth rate since Q4’21. Most of this growth has been driven by the artificial intelligence sector.
The BTC/USD pair crash coincided with the soaring liquidations. Data shows that liquidations soared by 92% in the last 24 days to over $1.23 billion. Bitcoin positions worth over $628 million were liquidated in this period.
Bitcoin has plunged despite improving macro numbers. For example, crude oil price has continued falling, with Brent and the West Texas Intermediate (WTI) falling below $100 amid the rising odds of a deal. ‘
BTC also retreated after Michael Saylor’s Strategy announced that it dumped coins worth over $2.5 million. It was the first time it had sold coins since 2022.
BTC/USD Technical Analysis
The daily chart shows that the BTC/USD pair has crashed in the past few weeks. It has dropped from a high of 82,650 on May 6 to the current 67,365, its lowest point since April 5.
The retreat started after it formed a giant rising wedge pattern. This is a common bearish reversal sign in technical analysis. Bitcoin has moved below the 50-day and 100-day Exponential Moving Averages (EMA). Also, the Average Directional Index (ADX) has jumped, a sign that the rally is accelerating. Therefore, the most likely scenario is where it continues falling, potentially to the key support level at 60,000.
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