The BTC/USD price has been in a consolidation phase for more than 120 days.
Set a buy-stop at 19,600 and a take-profit at 20,200.Add a stop-loss at 18,500.Timeline: 1-2 days.
Set a sell-stop at 18,500 and a take-profit at 17,500.Add a stop-loss at 20,500.
The BTC/USD price remained in a tight range on Wednesday morning as the US dollar index continued rising. It dropped to a low of 18,840, which was the lowest level since September 28. It has fallen by about 7% from the highest point this month.
Bitcoin consolidation continues
The BTC/USD price has been in a consolidation phase for more than 120 days. In this period, the coin has hovered around the 20,000 level. This consolidation resembles what happened prior to major moves in the cryptocurrency market. For example, it consolidated before the significant rally that happened in 2020.
Bitcoin dropped in the overnight session even after America’s oldest bank, Bank of New York Mellon, opened for crypto business. The company started receiving clients’ cryptocurrencies, becoming the first major American bank to do so.
This move came after the bank received authorization from New York’s financial regulator to receive BTC and ether. As a result, the company will store the crypto keys and provide the same bookkeeping services.
Bitcoin pulled back as the US dollar index (DXY) continued rallying. The greenback has surged by more than 20% this year and is now hovering near its highest level in more than 20 years. It rose to a high of $114 during the overnight session, which was close to its highest point this year.
Meanwhile, on-chain metrics show that there is some relative strength in the BTC market. For example, Bitcoin’s hash rate continued rising and is hovering near its all-time high. At the same time, there are signs that Bitcoin whales are accumulating, hoping that the bear market capitulation is happening.
At the same time, the market structure and investor behaviour is sigmaling thar the bearish trend is nearing its end. For example, Bitcoin has struggled moving below the year-to-date low of 17,850.
On the 4H chart, we see that the BTC/USD price has been in a consolidation phase. Most recently, it has formed an ascending chanel that is shown in black. It is now at the lower side of this channel. The pair has also moved slightly below the 25-day and 50-day moving averages while the MACD has dropped below the neutral point.
Therefore, the pair will likely resume the bullish trend as buyers target the upper side of the channel at about 20,500. A drop below 18,500 will invalidate the bullish view.