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BTC/USD Forex Signal: Bearish Flag Points to 20,000 – 24 August 2022

The pair will likely have a bearish breakout as sellers target the key support at 20,000.

Bearish view

Sell the BTC/USD pair and set a take-profit at 20,000.Add a stop-loss at 23,500.Timeline: 1 day.

Bullish view

Set a buy-stop at 22,000 and a take-profit at 24,000.Add a stop-loss at 20,000.

The BTC/USD price moved sideways as investors reflected on the recent sell-off. The pair was trading at 21,550 during the Asian session, which was significantly lower than this month’s high of 25,271. Other cryptocurrencies like Ethereum and BNB also continued moving sideways.


Bitcoin sell-off pauses

Bitcoin has been in a strong comeback since June. It managed to move from the year-to-date low of about $17,600 to a high of 25,155. This rebound happened as investors bought the dip in both cryptocurrencies and global equities.

This week, however, the pair has lost its bullish momentum and crashed to the lowest level since July 26. Analysts attribute the sell-off to the recent minutes, which showed that the Federal Reserve was committed to hiking interest rates.

Fed officials believe that more hikes are necessary in order to prevent inflation from being entrenched in the economy. At the same time, they are worried about hiking too fast, which could lead to a hard landing of the economy.

The BTC/USD stabilized as the US dollar index pulled back slightly following weak housing and PMI numbers from the US. The data showed that the services sector contracted hard in August while new home sales dropped by a whopping 12.3%. Therefore, analysts expect that the Fed will slow on its hikes.

Another concern among investors is that network activity has been a bit weak in the past few weeks. The number of new addresses in the network has been under pressure during the recent rally. Also, according to Glassnode, miner revenue from fees has also been a bit weak.

In addition, exchange flows have dropped to the lowest level since late 2020 while speculative interest has been falling. These numbers imply that cryptocurrencies likely went through a bear market rally.

BTC/USD forecast

The BTC/USD price has been in a strong bearish trend in the past few days. The sell-off paused on Tuesday as the pair remained slightly below 22,000. It has moved below the 25-day and 50-day moving averages.

In addition, the pair crashed below the lower side of the ascending triangle pattern that is shown in purple. The MACD also moved below the neutral level while the pair has formed what looks like a bearish flag pattern. Therefore, the pair will likely have a bearish breakout as sellers target the key support at 20,000.

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