Source: PaxForex Premium Analytics Portal, Fundamental Insight
After China continues its crackdown on miners and, with equity markets heading towards a potential correction, Bitcoin resumes its orderly descend. It is now on its way to challenge the psychological 30,000 level, which does not pose significant support. There is more downside to price action before testing its next horizontal support area near 24,000, which will close a previous gap. Interest rate jitters and inflation fears are set to dominate summer trading for equity markets, and a sell-off will force Bitcoin lower.
Adding to selling pressure is this Friday’s $2.5 billion worth of Bitcoin options expiration plus an additional $2.0 billion worth of futures contracts. Data shows that bears are in control of most contracts, which can provide a catalyst for a breakdown below 30,000. It can suck in more sell orders, with many retail stop-loss orders just below this level. Bitcoin remains correlated to equity markets, a fact many Bitcoin fanatics ignore. Therefore, a volatile ride down into valid support levels is likely to follow over the next few weeks.
The forecast for BTC/USD remains bearish after price action failed to sustain its rebound. With the Tenkan-sen and the Kijun-sen descending, bears are likely to pressure this cryptocurrency below its 30,000 level. The Ichimoku Kinko Hyo Cloud adds to selling pressure and maintains a bearish bias. After the CCI moved into extreme oversold territory, it has more downside potential. Will bears take advantage of ongoing selling pressure and force BTC/USD into its next horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the BTC/USD remain inside the or breakdown below the 30,925 to 33,250 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 32,530
- Take Profit Zone: 22,615 – 24,075
- Stop Loss Level: 34,125
Should price action for the BTC/USD breakout above 33,250, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 34,125
- Take Profit Zone: 39,870 – 41,265
- Stop Loss Level: 33,250
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
