BTC/USD Forex Signal: Neutral Sentiment With A Bullish Bias

5/11/2023 4:55:07 AM

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Buy the btc/usd pair and set a take-profit at 29,000.
Add a stop-loss at 26,500.
Timeline: 1 day.

Bearish view

Set a sell-stop at 27,100 and a take-profit at 26,000.
Add a stop-loss at 29,000.

Bitcoin retreated to the lowest level since March 28 even as the congestion issues faded and the US published encouraging consumer price index (CPI) data. The BTC/USD pair dropped to a low of 26,833, which was significantly lower than last month's high of 31,000.Bitcoin congestion challenges ease

The BTC/USD price has been in the spotlight this week because of the rising congestion in the Bitcoin ecosystem. On Monday, this congestion pushed Binance to suspend transactions as costs surged. In the past two days, this congestion has eased. According to YCharts, the average cost of a Bitcoin transaction dropped from $30 to $20 on Thursday morning.

Bitcoin also reacted mildly to the latest American consumer price index data published on Wednesday. The data showed that the headline consumer inflation rose from 0.1% in March to 0.4% in April. On a YoY basis, however, the figure dropped to 4.9%, the lowest level since 2020.

Further, core inflation also dropped from 5.5% to 5.4% in April. Therefore, there is a likelihood that the Federal Reserve will start a strategic pause since the American economy is facing substantial challenges. Some of these challenges are the commercial real estate sector and the ongoing debt ceiling issue.

Bitcoin and stocks initially rose slightly after the inflation data and then erased those gains. The Dow Jones dropped by more than 30 points while the Nasdaq 100 and S&P 500 erased some of their initial gains. Meanwhile, the US dollar index dropped by 16 basis points.BTC/USD technical analysis

The BTC/USD pair has erased some of the gains it made in April. On Wednesday, it dropped to a low of 26,833, which was lower than the year-to-date high of 31,000. The pair moved slightly below the key support level at 27,000, the lowest swing on April 24. It has also moved below the 50-day moving average and the middle line of the Bollinger Bands.

Further, the pair has formed what looks like a hammer pattern, which is usually a bullish sign. Therefore, the outlook of Bitcoin is neutral with a bullish bias. This means that it will likely rise to the descending blue trendline at about $29,000. More downsides will be confirmed if the pair moves below this week's low of 26,833.

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