I suspect that the pair will resume the bullish trend as bulls target the upper side of the channel once again.
Buy the BTC/USD and set a take-profit at 24,500.Add a stop-loss at 21,500.Timeline: 1-2 days.
Set a sell-stop at 22400 and a take-profit at 21,500.Add a stop-loss at 24,000.
The BTC/USD price continued struggling during the Asian session as the market reacted to the mixed session on Wall Street. Bitcoin was trading at about $23,000, which was still lower than last week’s high of $24,568.
Bitcoin Remains Under Pressure
Bitcoin reacted positively to last week’s interest rate decision by the Federal Reserve and the subsequent weak GDP data. The Fed decided to hike the interest rate by 0.75% as most analysts were expecting. The rate hike brought the total year-to-date rate increases to 225 basis points.
In its decision, the Fed remained confident that more rate hikes were necessary to lower inflation. However, recent data suggests that the Fed could lower the speed of rate hikes. For example, GDP numbers confirmed that the US moved to a technical recession in the second quarter.
Further numbers showed that the economy was struggling. For example, with mortgage rates rising, new and existing home sales have dropped sharply in the past few months. Retail sales and consumer confidence have all declined.
Most importantly, there are signs that inflation is slowing. For example, the price of gasoline and other important commodities like copper and aluminum have all slipped. Therefore, there is a likelihood that the Fed will slow its rate hikes.
Meanwhile, Bitcoin has struggled as investors worry about the strength of the recent recovery. The main concern is that this could be a bear market rally. A look at on-chain data shows that the number of Bitcoin active addresses has continued in a firmly well-defined downtrend channel.
At the same time, capacity in Bitcoin Lightning Network public channels has continued rising. Therefore, it is still too early to determine whether Bitcoin is still in a solid bullish trend. For that to happen, bulls need to push it above last week’s high of 24,538.
The four-hour chart shows that the BTC/USD pair has been in a bullish trend in the past few weeks. This trend, however, has not been a straight line. As a result, it has formed a rising channel that is shown in red. The current price is actually at the middle of this channel, which explains why it is consolidating at the 25-day and 50-day moving averages.
Therefore, I suspect that the pair will resume the bullish trend as bulls target the upper side of the channel once again. Another potential scenario is where it drops to the lower side of the channel.
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