(MENAFN- Daily Forex) Bearish view
Sell the BTC/USD pair and set a take-profit at 61,000. Add a sop-loss at 66,000. Timeline: 1-2 days.
Bullish view
Set a buy-stop at 65,500 and a take-profit at 67,000. Add a stop-loss at 63,000.
Bitcoin price continued its strong crash in the overnight session as the coin lacked a clear catalyst. The BTC/USD pair plunged to a low of 64,000, its lowest point since May 15th. It has crashed by double digits from its highest level this year.
Bitcoin has had no major catalyst in the past two months since the most important ones have already happened. The Securities and Exchange Commission (SEC) has already approved spot Bitcoin ETFs, which have done well, attracting billions of dollars in inflows.
Most recently, however, these funds have shed some assets as outflows increased. These outflows jumped after Bitcoin failed to move above the crucial resistance level at $72,000 earlier this month.
Bitcoin has already had its halving event that lowered the block rewards offered to miners. Recent data shows that most mining companies have started to produce less coins following the halving event. Some of them have also capitulated and started selling some of their Bitcoin holdings.
Worse, the Fed has signaled that it will not start to cut interest rates any time soon since inflation has remained stubbornly high. Data released last week showed that, while inflation dropped in May, it remains significantly above the Fed's target of 2.0%.
Therefore, all these factors have pushed many Bitcoin longs to capitulate and sell their positions in a bid to take profits. I believe that more sustained bullish moves will be confirmed if the price of Bitcoin rises above the year-to-date high of 73,600.
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BTC/USD technical analysis
The price of Bitcoin has plunged hard in the past few days. This retreat happened after the coin formed a double-top pattern at 71,893 on May 21st and June 27th. The pair has now crashed below the neckline of this pattern at 66,330.
It has also remained below the 50-period Exponential Moving Average (EMA) and is hovering near the 50% Fibonacci Retracement leve. Bitcoin is also nearing the first support of the Woodie pivot point.
Therefore, the path of the least resistance for the pair is bearish. Based on the double-top chart pattern, it could plunge to the next target at around 61,000, which is about 7% below the current level.
The alternative situation is where the pair forms a dead cat bounce and retests the resistance point at 66,000.
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