Bearish view
- Sell the BTC/USD pair and set a take-profit at 118,000.
- Add a stop-loss at 125,000.
- Timeline: 1-2 days.
Bullish view
- Buy the BTC/USD pair and set a take-profit at 125,000.
- Add a stop-loss at 118,000.
Bitcoin price pulled back sharply in the past few days, moving from the all-time high of $126,410 to the current $121,350. The BTC/USD pair pulled back as traders waited for the upcoming Federal Reserve minutes and updates on the US government shutdown.
Bitcoin Price Rally Takes a Breather
The BTC/USD pair retreated sharply as the recent rally took a breather. This decline happened as some investors started to book profits after it jumped to a record high.
It also happened as Donald Trump sent mixed signals about the government shutdown. In a statement on Monday, the president said that he was ready to talk with the Democrats on the healthcare sector.
The White House then walked back that statement and warned that backpay for workers during the shutdown was not guaranteed. Also, officials reiterated that the administration would consider mass layoffs in the country.
Bitcoin and gold have done well in the past few days as the government shutdown happened. Gold has jumped to over $4,000 for the first time ever. The end of the shutdown would likely lead to a retracement in the two assets.
Still, they have robust catalysts that will boost its performance in the coming months. For one, there are signs that the American economy is struggling, with most of the ongoing growth being in the AI space.
The labor market is struggling, with a recent report by ADP showing that the economy lost 36,000 jobs in September. Also, the unemployment rate remains high, while a report by the New York Fed showed that consumers were concerned about inflation.
Therefore, the ongoing concerns about the economy means that the Fed will likely continue cutting interest rates this month. Bitcoin will also be boosted by the ongoing jump in ETF inflows.
BTC/USD Technical Analysis
The daily chart shows that the BTC/USD exchange rate has pulled back in the past few days, moving from a high of 126,410 to the current 122,000. It has moved below the important support level at 124,400, the previous all-time high.
The pair has formed a shooting star candle, which is made up of a small body and a long upper shadow. Also, the Relative Strength Index (RSI) moved from the overbought point at 70 to the current 62.
Therefore, the most likely Bitcoin forecast is where it retreats a bit and then resumes the uptrend. This outlook may see it drop to below 120,000 before making an eventual comeback.
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