- Sell the BTC/USD pair and set a profit target at 108,000.
- Add a stop-loss at 113,000.
- Term: 1-2 days.
- Buy the BTC/USD pair and set a take-profit at 113,000.
- Add a stop-loss at 108,000.
The BTC/USD currency pair continued its downward trend even after the Federal Reserve cut interest rates for the second consecutive meeting. It fell to a low of 108.945, from this week’s high of 116.580.
Bitcoin price fell despite some major developments. The first big news was that the Federal Reserve completed its two-day meeting and decided to reduce interest rates by 0.25%. Officials also decided to end the quantitative tightening process in December.
Bitcoin fell after the latest Fed decision as investors sold the news because it was in line with expectations. Additionally, Jerome Powell hinted that the bank might not cut again in December, as most analysts expected.
The BTC/USD pair retreated even as US investors continued to buy Bitcoin through ETFs. Inflows into Bitcoin ETFs have continued this week, taking the cumulative total to over $64 in an uptrend.
These funds now hold Bitcoin tokens worth over $54 billion, with BlackRock’s IBIT holding over $92 billion in assets.
The next major catalyst for the price of Bitcoin is the upcoming meeting between Donald Trump and Xi Jinping at the APEC Summit in South Korea, where the two leaders will discuss trade and other topics.
Analysts hope that both sides will reach an agreement that will reduce tensions between them. One way this is happening is that China has started buying American soybeans, representing a big political victory for Donald Trump.
Still, the price of BTC may fall even when the two sides reach a deal because it has already been discounted by market participants.
The daily time frame chart shows that the BTC/USD pair retraced for three consecutive days and is now at its lowest level in days. It has moved below the 100-day EMA and the Ichimoku cloud indicator.
The pair has also fallen below the 23.6% Fibonacci retracement level at 114.103, a sign that the bears are in control for now. Major oscillators such as the Relative Strength Index (RSI) and the MACD have also pointed downwards.
Therefore, the pair is likely to continue falling, potentially to the next key support level at 106.600, the 38.2% Fibonacci retracement level. A move above the resistance at 116.228 will invalidate the bearish outlook.
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Crispus Nyaga is a financial analyst, coach and trader with over 8 years in the industry. He has worked for leading companies such as ATFX, easyMarkets, and OctaFx. Additionally, he has published widely on platforms such as SeekingAlpha, Investing Cube, Capital.com, and Invezz. In his free time, he enjoys watching golf and spending time with his wife and son.