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Bearish View
- Sell the BTC/USD pair and set a take-profit at 20,500.
- Add a stop-loss at 23,000.
- Timeline: 1 day.
Bullish View
- Set a buy-stop at 22,800 and a take-profit at 24,000.
- Add a stop-loss at 21,500.
The BTC/USD price rose to an important resistance level as the mood among investors rose. Bitcoin rose to $22,600, which was the highest level since June. That increase was about 28.50% above the lowest level in June. Other cryptocurrency prices like Ethereum and Ripple rose while the total market cap of all coins jumped to over $1 trillion.
Improved Sentiment in Crypto
Bitcoin and other cryptocurrencies have been in a strong bullish trend as investors bought the dip. This rebound coincided with the overall rebound of American stocks and the relatively weak US dollar. The US dollar index, which soared to $109.30 last week, pulled back to about $107.
American shares rose even as companies like Goldman Sachs, Morgan Stanley, and Bank of America warned about the economy. Most of these banks warned that inflation was affecting their businesses, with Goldman Sachs warning that it could have some job cuts.
Bitcoin rose as investors lowered their expectations of the Federal Reserve. After last week’s inflation data, most analysts warned that the Fed will likely deliver a 100 basis point rate hike. Now, there are signs that the bank will deliver a relatively smaller rate hike.
The BTC/USD pair also rose as its correlation with Ethereum continued. Ethereum jumped from a year-to-date low of about $800 to over $1,500 because of the upcoming merge of the current version with the Beacon Chain. In a recent statement, the developers said that the merge will happen in September. As a result, Ethereum will move from a proof-of-work network into a proof-of-stake platform.
Meanwhile, on-chain data shows that there have been some inflows into Bitcoin and other cryptocurrencies in the past few days. For example, the total value locked (TVL) in DeFi jumped from less than $73 billion early this month to about $82 billion.
BTC/USD Forecast
The four-hour chart shows that the BTC/USD pair rose to a high of 22,610 as demand for Bitcoin rose. As shown below, this price was an important resistance level since the pair struggled to move above it several times since June. In most periods, assets tend to waver when they rise to an important resistance point.
The pair remains slightly above the 25-day moving average while the Relative Strength Index (RSI) dropped from the oversold level of 70. The pair will likely pull back on Tuesday as some buyers take profit. If this happens, the next key support to watch will be at 20,500. On the other hand, a move above 22,700 will signal that bulls have prevailed, which will see it rise to about 25,000.
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