Bullish view
- Buy the BTC/USD pair and set a take-profit at 66,000.
- Add a stop-loss at 62,000.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 63,000 and a take-profit at 60,000.
- Add a stop-loss at 66,000.
Bitcoin price staged a strong recovery in the past few days as a sense of calm returned to the market. The BTC/USD pair surged to over 64,000, which was much higher than this month’s low of 56,540.
A sense of calm returns
Bitcoin and other risk assets like global stocks have rebounded in the past few days as bad news became good news for the market. The Dow Jones index rose to over $38,800 while the Nasdaq 100 and S&P 500 soared to $17,900 and $5,130, respectively.
Meanwhile, the US dollar index (DXY) tumbled to a monthly low of $104.51 while bond yields slumped. The 10-year yield dropped to 4.50% while the 30-year and the 5-year fell to 4.66% and 4.48%, respectively.
This performance happened after the US published weak economic numbers last week, signaling that the Fed may deliver more rate cuts than expected. The first report came from the Conference Board, which revealed that consumer confidence dipped to its lowest point since 2022.
Further data by the Institute of Supply Management (ISM) revealed that the manufacturing and non-manufacturing PMI numbers retreated in April. That is a sign that the economy was slowing.
And finally, the most-anticipated jobs report revealed that the economy added fewer jobs than expected while the unemployment rate rose to 3.9%. The economy added 175k jobs, down from 315k in March. The average hourly earnings fell to 3.9%, missing the estimated 4.0%.
The implication of all this is that the Fed will start to cut interest rates in the coming months. Analysts see the bank delivering two cuts later this year. This is in line with the Fed’s meeting, in which the officials noted that they would be data-dependent.
BTC/USD forecast
The BTC/USD pair has been in a strong recovery in the past few days as some Bitcoin ETFs added some inflows. On the 4H chart, the 25-period and 50-period moving averages have formed a bullish crossover.
Bitcoin has also formed a bullish pennant pattern, which is a positive sign. The MACD indicator has moved above the neutral level while the Relative Strength Index (RSI) is approaching the overbought point.
Therefore, the pair will likely continue rising as buyers target the key resistance at 66,000. The alternative scenario is where it drops to the intersection of the 25 and 50-period moving averages at 62,000.
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Rehana William |Financial Consultant _Forex_Gold Xauusd| Fund Manager 