A strong setback cannot be ruled out

It is likely that the pair will resume the downtrend this week.

Bearish view

  • Set a sell stop at 36,000 and a take profit at 33,000.
  • Add a stop-loss at 38,000.
  • Lead time: 1-2 days.

Bullish view

  • Set a buy-stop at 39,000 and a take-profit at 41,000.
  • Add a stop-loss at 37,000.

The BTC/USD pair remained in a tight range even after a major warning from a senior IMF official. The pair is trading at 38,000, where it has been for the past few days.

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Bitcoin price remains stable

The performance of the BTC/USD pair is attributed to several factors. First, it tipped higher as US stocks rebounded ahead of key quarterly results from major tech companies like Amazon, Meta Platforms and Alphabet.

The Dow Jones and S&P 500 indexes surged as investors anticipated strong results from these tech giants. After reporting weak results last month, analysts believe Amazon will report strong fourth-quarter results due to the holiday season and demand for cloud computing.

Over the past few weeks, the performance of Bitcoin and other cryptocurrencies has mirrored that of US stocks. This is mainly because the Fed is driving market performance. In its decision last week, the bank hinted that it would raise interest rates several times this year.

The BTC/USD pair faltered after a senior IMF adviser warned of the potential risks cryptocurrencies pose to emerging and developing countries. Already, El Salvador has become the first country to accept Bitcoin as legal tender, a move that has been criticized by the IMF.

Other emerging countries have announced currency restriction measures. China has already banned cryptocurrencies while India is considering banning coins. In a statement last month, Russia’s central bank recommended the government ban digital coins.

Still, a closer look at on-chain data shows that activity in the Bitcoin ecosystem is doing well. For example, the mining difficulty jumped near an all-time high. At the same time, the hash rate has been doing quite well over the past few days.

BTC/USD forecast

The four-hour chart shows that the BTC/USD pair has been in a tight range for the past few days. The pair sits slightly above the standard pivot point. It is also hovering near the 25- and 50-day exponential moving averages (EMAs), while the relative strength index (RSI) has been trending up.

However, a closer look at the pair shows that it has formed a rising wedge pattern. Therefore, it is likely that the pair will resume the downtrend this week. If that happens, a drop to last week’s low at 30,000 cannot be ruled out.

BTC/USD

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