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A bullish breakout cannot be ruled out, with the next key resistance point being at 30,000.
- Buy the BTC/USD pair and set a take-profit at 30,000.
- Add a stop-loss at 27,500.
- Timeline: 1 day.
- Set a sell-stop at 27,600 and a take-profit at 26,000.
- Add a stop-loss at 28,800.
The BTC/USD pair remained in a tight range this week as concerns about the next actions by the Federal Reserve. Bitcoin was trading at $28,000, where it has been in the past two weeks. The price is significantly above the year-to-date low of ~15,500.
The BTC/USD pair moved sideways in the overnight session as investors assessed the next actions by the Federal Reserve. This price action was in line with the performance of American stocks, with the Dow Jones rising by 65 points. In the same period, the S&P 500 index declined by 36 basis points.
The BTC/USD pair moved sideways as the freefall of the US dollar index paused. The index rose by 32 basis points to $101.60, which is still significantly below the highest point in March and in 2022. Historically, Bitcoin has has an inverse correlation with the US dollar.
Meanwhile, the pair also reacted to a hawkish statement by the Federal Reserve. In a statement, Loretta Mester, the head of the Cleveland Fed, said that she supported more rate hikes in the coming months. She argued that the banking crisis has faded and that inflation remains significantly high. She said:
“I think we’re going to have to go a little bit higher from where we are, a little bit more and then hold there for some time in order to make sure inflation is on that sustainable downward path to 2%.”
The Fed has hinted that it will continue being data-dependent in the coming months. Therefore, the bank’s officials will pay a close attention to the upcoming non-farm payrolls (NFP) data set for Friday. These numbers will provide more information about the state of the labor market.
The BTC/USD pair has been in a tight range in the past few days. It has found strong resistance at the 28,895 level. The pair is also consolidating at the 25-period and 50-period moving averages while the MACD moved to the neutral point. Volume has also been in a downward trend.
The pair also seems to have formed an ascending triangle pattern. Therefore, a bullish breakout cannot be ruled out, with the next key resistance point being at 30,000. A break below the ascending trendline will invalidate the bullish view.
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