Bullish view
Buy the BTC/USD pair and set a take-profit at 70,000.
Add a stop-loss at 60,000.
Timeline: 1-2 days.
Bearish view
Sell the BTC/USD pair and set a take-profit at 60,000.
Add a stop-loss at 70,000.
Bitcoin (BTC.X) continued its consolidation today, August 6, as investors waited for the next catalyst and as the stock market jumped. The BTC/USD pair was trading at 64,816, where it has remained in the past few days.
A possible reason for the consolidation is that investors are rotating to the stock market, which is booming. The Dow Jones and S&P 500 indices jumped to a record high, helped by strong corporate earnings. Some of the top companies that released strong numbers were Microsoft (MSFT), Palantir (PLTR), and Alphabet (GOOGL).
On the positive side, Bitcoin ETFs have continued adding assets in the past few days. These funds have added over $500 million worth of assets in the past three days. They have had cumulative inflows of $51 billion and now hold assets worth over $78 billion.
Bitcoin will likely experience some volatility after the US publishes the latest nonfarm payrolls (NFP) report on Friday. Economists expect the data to show that the economy added about 80k jobs last month, an improvement from the previous 57k.
The NFP report is an important metric for Bitcoin because of its impact on the Federal Reserve. A strong number means that the Fed may be incentivized to hike interest rates later this year, which is a bearish thing for Bitcoin. Recently, however, BTC has reacted mildly to these numbers and Fed actions.
BTC/USD Technical Analysis
The daily chart reveals that the BTC/USD pair has been stuck in a range in the past few months, mirroring the performance of gold and other non-yielding assets. Short-term and long-term bond yields have jumped in the past few months as odds that the Fed will hike interest rates jumped.
The pair is consolidating at the 50-day moving average, a sign that bulls and bears are at an equilibrium. At the same time, the Relative Strength Index (RSI) has jumped above the neutral level of 50.
Therefore, the pair will likely remain in this range today. This consolidation, however, could be the calm before the storm. If this is correct, the pair will likely breakout in either direction, with the key resistance and support levels being at 70,000 and 60,000.
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