The BTC/USD pair has formed a bearish flag pattern, which is usually a sign that the pair will have a bearish breakout.
- Sell the BTC/USD pair and set a take-profit at 22,000.
- Add a stop-loss at 24,500.
- Timeline: 1-2 days.
- Set a buy-stop at 24,100 and a take-profit at 25,200.
- Add a stop-loss at 22,500.
The BTC/USD pair moved sideways as concerns about the rising bond yields continued to put pressure on risky assets. Bitcoin was trading at $23,647, which was a few points below this week’s high of 24,000. It remained under pressure for a few days after it moved above the resistance point at 25,000.
The main concern in the crypto market is the rising bond yields and the US dollar index (DXY). The US dollar has jumped to $105, which was the highest point since January. In most periods, Bitcoin tends to move inversely with the US dollar. At the same time, the rising bond yields have sent shivers in the market.
The ten-year bond yield has risen to about 4% while the 2-year has jumped to over 5%. The yield curve inversion means that investors anticipate that the American economy has more risk of a recession in the coming months.
And recent data have been supportive of the rising interest rates in the coming months. On Wednesday, data showed that the manufacturing PMI rose to over 47 in February, continuing the strong comeback that started a few months ago. Consumer inflation has remained at an elevated level while retail sales have been in a bullish trend.
Therefore, there is a likelihood that Bitcoin and other riskier assets will remain under pressure in the coming months. Some analysts believe that the recent rally was part of a relief rally, similar to the one we saw in October last year.
Bitcoin had a strong performance early this year as hopes of a Fed pivot increased. This rebound saw Bitcoin jump to above $25,000 in February. On the 4H chart, the BTC/USD pair has moved below the important resistance level at 25,200. It formed a triple-top pattern at this level. It has dropped below the 50-period exponential moving average (EMA).
The BTC/USD pair has formed a bearish flag pattern, which is usually a sign that the pair will have a bearish breakout. The histogram of the MACD has moved above the neutral point while the MACD and signal lines have continued rising. At the same time, the Relative Strength Index (RSI) has moved sideways.
The pair has moved below the key support at 23,968, the lowest point on February 20th. Therefore, the pair will likely have a bearish breakout in the coming days. If this happens, it will likely retest the support at 22,000.