Bullish view
- Buy the BTC/USD pair and set a take-profit at 91,000.
- Add a stop-loss at 84,000.
- Timeline: 1-2 days.
Bearish view
- Sell the BTC/USD pair and set a take-profit at 84,000.
- Add a stop-loss at 91,000.
The BTC/USD pair rebounded, moving from this month’s low of 80,637 to the current 88,500. It has jumped by ~10% from its lowest point this month and is hovering at its highest point since November 20.
Bitcoin Price Rebound Continues
The BTC/USD pair bounced back as investors bought the dip after the pair plunged by 37% from its highest point this year. This rebound happened as the Crypto Fear and Greed Index tumbled to the extreme fear zone of 8 during the weekend.
In most cases, Bitcoin and other coins normally rebound when there is extreme fear in the market as investors buy the dip.
The BTC/USD pair also rebounded as risky assets rebounded. Data shows that the tech-heavy Nasdaq 100 Index rose by over 580 points on Monday, with top tech companies like Tesla and Nvidia being the top gainers.
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It also jumped as odds that the Federal Reserve will cut interest rates in the December meeting jumped to over 75%. Bitcoin and other cryptocurrencies do well when the Fed is cutting interest rates as that normally makes money more affordable. Notably, the rate cut will happen at a time when the bank is ending the quantitative tightening (QT) policies.
Still, there is a risk that the ongoing Bitcoin price rebound is a dead cat bounce, a situation where a falling asset rebounds briefly and then resumes the downtrend. It is often known as a bull trap.
Looking ahead, the Bitcoin price will react mildly to the upcoming macro data from the United States, including the housing price index and the consumer confidence report by the Conference Board.
BTC/USD Technical Analysis
The daily timeframe chart shows that the BTC/USD pair has been in a strong downward trend in the past few weeks, moving from the all-time high of 126,200 in October to the current 88,400.
Bitcoin has now rebounded after forming a hammer candlestick pattern, which is made up of a long lower shadow and a small body. This pattern is one of the most common bullish reversal sign.
Therefore, the pair will likely continue rising as bulls target the next key resistance level at 90,000. A move above that level will point to more gains as investors continue buying the dip. However, there is a likelihood that the BTC/USD pair will retreat and retest the key support level at 80,637, its lowest level this month.
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