Following a two-month rest in the $84,000–$88,000 range, Bitcoin prices resumed their decline. The market has recently liquidated over-leveraged margin positions, with short ones likely to come next. The process of balancing the books has not yet been completed, nor has speculation washed away. BTCUSD is now targeting the April low of $74,500. Protective orders remaining from previous cascading liquidations are likely to be placed below this level, potentially sparking another wave of panic selling. The recent sharp drop forced the elimination of long positions worth over $1.6 billion. Due to low liquidity over the weekend, this created an avalanche effect.
In addition, markets weren’t happy with the appointment of Mark Warsh as the potential Federal Reserve (Fed) Chair. His adherence to hawkish rhetoric raises concerns about a more restrictive monetary policy path than previously anticipated, suggesting that interest rates could remain elevated for longer.
This sentiment is confirmed by the Fear and Greed Index reading. It fell to 14 (“Extreme fear”), reflecting a state of panic among traders.
Looking at the BTCUSD chart, the following conclusions can be made. First, the pair is likely to enter the $57,000–$66,000 range, where opening buy positions is recommended. Downward momentum is expected to wane as prices approach deeper support levels. Once the pair has solid backing, a technical rebound may follow.
The overall recommendation is to buy BTCUSD from the $64,000 support. Profits should be taken at $87,000. Stop Loss could be set at $56,000.
The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
