Bearish view
Sell the BTC/USD pair and set a take-profit at 72,400.
Add a stop-loss at 77,000.
Timeline: 1-2 days.
Bullish view
Buy the BTC/USD pair and set a take-profit at 77,000.
Add a stop-loss at 72,400.
Bitcoin price retreated and moved below the crucial support level of $76,000 as investors reacted to the Federal Reserve interest rate decision and the new developments on the CLARITY Act. The BTC/USD pair was trading at 75,435, down by nearly 10% from its highest point in August.
Bitcoin fell after the Federal Reserve raised interest rates by 0.25% to a range of 3.75% to 4%, tightening financial conditions. The decision was unanimous, and officials signaled further hikes later this year as they expect inflation to keep climbing in the coming months amid higher energy prices.
Bitcoin and other assets normally underperform the market whenever the Fed is hiking interest rates. Indeed, US stocks continued falling, with the Dow Jones, S&P 500, and Nasdaq 100 indices falling by 770, 53, and 80 points, respectively.
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The BTC/USD pair also reacted to the falling odds that the CLARITY Act will become law this year after it failed a close procedural vote in the Senate. Odds of the bill becoming law this year have fallen to about 10% on Polymarket.
These events pushed investors to start selling their ETFs. Data shows that the funds lost over $450 million in assets on Tuesday and over $500 million on Thursday after the Fed decision.
There are signs that investors are getting less greedy, with the Fear and Greed Index falling to 62 from last month’s high of over 75. Bitcoin does well whenever investors are more greedy.
BTC/USD Technical Analysis
The daily chart shows that the BTC/USD pair has come under pressure in the past few weeks. It has slipped from a high of 82,158 in August to the current 75,745.
The pair has dropped below the 23.6% Fibonacci Retracement level. It also slipped below the key support level of 76,215, the neckline of the head-and-shoulders pattern. H&S is one of the most bearish signs in technical analysis.
Bitcoin has remained below the 50-period Exponential Moving Average (EMA) and is slowly forming a bearish flag pattern. Therefore, the path of the least resistance for the BTC/USD pair is bearish, with the next key target to watch being the 50% retracement level of 72,400.
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