The BTC/USD pair has been in a consolidation after it plunged hard on March 3. It has formed a bearish pennant pattern, which is a bearish sign.
- Sell the BTC/USD pair and set a take-profit at 21,400.
- Add a stop-loss at 23,500.
- Timeline: 1-2 days.
- Set a buy-stop at 22,800 and a take-profit at 23,500.
- Add a stop-loss at 21,800.
The BTC/USD price remained in a tight range as investors looked forward to key economic events scheduled for the next few days. Bitcoin was hovering at about $22,500, where it has been in the past few days. Other cryptocurrencies like Ethereum and Ripple have also underperformed.
Bitcoin and other financial assets are staring at one of the biggest weeks in the first quarter of the year. The first major event will be a testimony by Jerome Powell, the Federal Reserve Chair. His testimony comes at a time when the economy is flashing mixed signals.
For example, government bond yields have surged in the past few months, with the 10-year hovering at 4%. Shorter-term yields have risen sharply, pushing the yield curve inversion to the lowest level in more than three decades. This is a signal that the market expects the economy to sink into a recession in the coming months.
On the other hand, data shows that the economy is doing modestly well. The savings rate remains significantly higher, helped by the strong unemployment rate. Data published in February showed that the unemployment rate dropped to a multi-decade low of 3.4% in January.
The US will publish the latest jobs numbers on Friday. Therefore, Jerome Powell’s statement will impact most assets, including the US dollar and Bitcoin. A more hawkish tone will be a bearish thing for Bitcoin and other risk assets like stocks.
Bitcoin is also battling other risks in the financial market. Some of these risks include the collapse of Silvergate Capital, one of the top banks for crypto banks. The company warned that it may not continue existing as a going concern.
The other risk is Binance, the biggest exchange in the world. Reports by the WSJ showed that the company’s Binance and Binance US operations were more connected.
The BTC/USD pair has been in a consolidation after it plunged hard on March 3. It has formed a bearish pennant pattern, which is a bearish sign. The pair has moved below the 25-day and 50-day moving averages. Oscillators like the Relative Strength Index (RSI) has moved slightly above the oversold level. It is also slightly below the Woodie pivot point.
Therefore, because of the bearish pennant pattern, the pair will likely have a bearish breakout as sellers target the first support at 21,426.