BTC/USD Forex Forecast: The Calm Before the Blast
Bearish view
- Sell the BTC/USD pair and set a take-profit at 22,000.
- Add a stop-loss at 24,000.
- Timeline: 1-2 days.
Bullish view
- Add a buy-stop at 23,500 and a take-profit at 25,000.
- Add a stop-loss at 22,000.
The price of bitcoin was slightly flat on Thursday morning as the market digested the Federal Reserve's latest action. The Fed's decision in its first meeting of the month was consistent with what most analysts expected. It raised rates by 0.25% for the first time in six meetings, putting the rate at 4.50% to 4.75%. The Bitcoin/USD pair was trading at 23,131, just a few points lower than the year-to-date high of 23,930.
4H Bitcoin price analysis
On the 4H chart, Bitcoin has been forming an alarming rising wedge pattern. Joining the highest peaks since January 23rd and the lowest points since January 13th yields this pattern. When the wedge approaches its confluence level, this pattern usually leads to a bearish breakout in price action analysis. This bearish breakout has already occurred, even though volume has been declining.
Meanwhile, trend indicators such as moving averages and Bollinger Bands have moved horizontally, indicating that the coin has experienced mild volatility. At the same time, the Relative Strength Index (RSI), which measures the rate of change of an asset, has formed a bearish divergence pattern, as shown below. A bearish divergence in technical analysis usually signals that the price of an asset will continue to fall.
The price of Bitcoin/USD has risen slightly above the 23.6% Fibonacci Retracement level. As a result, the four-hour chart suggests that the bearish trend will continue in the coming days. If this occurs, the reference point will be 22,000 psychological points (January 20 low).
A volume-supported rebound above 23,530, on the other hand, will indicate that there are still more buyers eager to push it above the resistance level of $24,000.
2H BTC/USD analysis
The BTC/USD price has remained flat over the last two trading sessions on the two-hour chart. It is consolidating between the regression trendline's lower and middle lines. Simultaneously, the Bitcoin Bullish Percent Index has reached an oversold level of 20.
As a result, in the near term, the pair is likely to consolidate between the regression channel at 22,735 and 23,680. A drop below the lower side of the channel indicates that the bears have won and will push the price to the next psychological level of 20,000. A recovery, on the other hand, could push it above the psychological level of 24,000.