Bullish View

• Buy the BTC/USD pair and set a take-profit at 22,500.
• Add a stop-loss at 19,000.
• Timeline: 1 day.

Bearish View

• Sell the BTC/USD pair and set a take-profit at 18,500.
• Add a stop-loss at 22,000.

The BTC/USD pair pulled back but remained in a tight range as investors waited for the upcoming bank earnings season. The pair is hovering at around 20,000, which is slightly below last week’s high of over 22,000.
 

Earnings and Strong US Dollar

The BTC/USD pair continued to consolidate as it mirrored the performance of other financial assets like stocks. On Monday, the Dow Jones declined by about 170 points while the Nasdaq index fell by 255 points. The closely-watched VIX index rose by over 7%.

This price action is mostly because of the expectations of a hawkish Federal Reserve after the strong American economic data. On Friday, numbers by the Bureau of Labor Statistics (BLS) showed that the country’s economy added over 372k jobs in June this year. This increase was better than what analysts were expecting. At the same time, the unemployment rate remained at 3.6%.

Therefore, Bitcoin investors believe that the Federal Reserve will continue hiking interest rates later this month. They have already priced in a 0.75% rate hike.

The next data to watch will be the latest American inflation data that comes out on Wednesday. Analysts believe that inflation remained at elevated levels in June this year. All of these explain why the US dollar has risen against most assets, including Bitcoin lately.

The BTC/USD pair has also declined ahead of the upcoming earnings season. Historically, Bitcoin tends to show some volatility as the bank earnings season kicks off. Some of the top banks that will publish their results this week are JP Morgan, Citigroup, Morgan Stanley, and Wells Fargo. Investors will watch statements by bank executives on the cryptocurrency sector.
 

BTC/USD Forecast

The BTC/USD pair rallied to a high of 22,500 last week. Since then, it has pulled back and is now trading at the lowest level since July 7th. It has managed to move below the key level at 21,914, which was the highest point on June 26th. The pair has dropped below the 25-day and 50-day moving averages while the Stochastic Oscillator has moved to the oversold level.

The pair seems like it has formed a cup and handle pattern. Therefore, there is a likelihood that Bitcoin will resume the bullish trend and possibly retest last week’s high at $22,500. If this happens, it will signal that bulls have prevailed and see it rise to 25,000.

(Click on image to enlarge)

More By This Author: