BTC/USD Forex Signal: Bitcoin Relief Rally to Continue| MENAFN.COM

Tuesday, 21 March 2023 05:32 GMT

BTC/USD Forex Signal: Bitcoin Relief Rally to Continue

(MENAFN- Daily Forex) Bullish View

  • Buy the BTC/USD pair and set a take-profit at 40,000.
  • Add a stop-loss at 33,000.
  • Timeline: 2 days.
Bearish View
  • Set a sell-stop at 35,000 and a take-profit at 33,000.
  • Add a stop-loss at 37,000.

The BTC/USD pair made a strong recovery after its deep sell-off during the weekend. Bitcoin is trading at $36,740, which is about 11% above the lowest level during the weekend. Other cryptocurrencies like Ethereum, Ripple , and Binance Coin also bounced back.

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Cryptocurrency prices have been in a strong bearish trend in the past few months. The decline started in November when BTC surged to an all-time high of almost $70,000. At the time, the total market capitalization of all cryptocurrencies tracked by CoinGecko was valued at over $3 trillion.

The recent decline coincided in a period when the Federal Reserve started turning hawkish. In November, the bank decided to start tapering its asset purchases. It lowered the purchases by about $15 billion and started to express worries about the country's inflation.

In December, the bank doubled the QE taper from $15 billion to $30 billion and hinted that it will end its purchases in March. The dot plot showed that officials expect to start hiking interest rates this year.

Therefore, the weekend cryptocurrency crash happened as investors worried about the upcoming Federal Open Market Committee (FOMC). The bank started its monetary policy meeting on Tuesday and will be concluded later today.

Economists expect that the FOMC will leave the interest rate unchanged between 0% and 0.25%. It will then slash its quantitative easing purchases. Most importantly, the bank will hint about three to four rate hikes this year.

Historically, Bitcoin and other cryptocurrency prices tend to decline in a period of high-interest rates. Besides, the easy-money policy was extremely good for cryptocurrencies as the market capitalization jumped to over $3 trillion.

Meanwhile, data shows that investors are extremely fearful about Bitcoin. The closely-watched Bitcoin fear and greed index has dropped to the extreme fear zone of 12.BTC/USD Forecast

The four-hour chart shows that the BTC/USD pair has made a comeback in the past few days. The pair remains significantly below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved above 50. It has also formed a small inverted head and shoulders pattern .

Therefore, the pair will likely continue rising ahead of the FOMC decision. If this happens, the next key resistance level to watch will be at 40,000.


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