Bearish View
Buy the BTC/USD pair and set a take-profit at 72,000.
Add a stop-loss at 81,000.
Timeline: 1-2 days.
Bullish view
Buy the BTC/USD pair and set a take-profit at 81,000.
Add a stop-loss at 72,000.
The BTC/USD pair was largely flat above 77,000 as a risk-on sentiment spread in the financial market amid the rising odds of a deal between the US and Iran. Bitcoin rose to $77,600, up from this week’s low of $74,140.
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US-Iran Deal Would be Bullish for Bitcoin
Like other financial assets, Bitcoin is reacting to the ongoing negotiations between the United States and Iran. In a statement on Monday, Donald Trump said that he hoped that a deal will be reached as this will avoid another phase of the bombing campaign.
Trump also hopes that the deal will lead to more countries in the region entering the Abraham Accords. He also hopes that, at some point, Iran will also join the accord, a move he believes will lead to peace in the Middle East.
A deal, if reached, will be bullish for Bitcoin and other risky assets because it would lead to lower oil prices and lower inflation. Indeed, Brent and the West Texas Intermediate dropped below $100 this week, and this trend may accelerate if the deal is reached.
Lower inflation will reduce the possibility of the Federal Reserve hiking interest rates. In most cases, Bitcoin and other risky assets do well when the Fed is either cutting rates or when it has hinted that it will start cutting.
Still, Bitcoin is still facing some major challenges. The most notable one is that its ETFs have suffered strong outflows in the past few weeks. They have lost over $1 billion in assets this month, erasing the gains made earlier this month.
Bitcoin has also experienced fading open interest, which is a sign that demand is waning. As such, a risk-on sentiment would likely help to reverse these losses.
BTC/USD Technical Analysis
Bitcoin price has pulled back after peaking at $82,847 earlier this month. It retreated to a low of $74,000 during the weekend. This was its lowest level since April 21 this year. It then stabilized amid hopes that the US and Iran will reach a deal.
The BTC/USD pair has stabilized slightly above the 50-day moving average, which has provided it with substantial support. It also remains below the lower side of the rising wedge pattern.
Therefore, the pair will likely remain on edge in the coming days. Losing the 50-day moving average will point to more downside, potentially to the key support at 70,000.
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