Last week, cryptocurrency market participants made another attempt to update the historical high in Bitcoin prices. However, the March high was once again beyond the reach of buyers, leading to a corrective pullback. Tuesday's trading session began with the downward movement intensifying, with the price targeting the late May lows near the 66500 level. With a number of important events expected tomorrow, the decline in Bitcoin prices may well continue.
According to Bloomberg, the correlation between Bitcoin and the 10-year US Treasury yield over the past month is -0.53, one of the lowest levels since 2010. With negative US inflation data and a hawkish report from the Federal Reserve meeting on Wednesday, bonds could fall significantly in value. This will cause bond yields to rise and Bitcoin as a non interest bearing asset will be on the outside looking in.
Tony Sycamore, market analyst at IG Australia Pty, notes that investors are risk averse ahead of tomorrow's events. On Monday, US ETFs on the major cryptocurrency saw $65 million in outflows. It was the first liquidity withdrawal by traders in the last 19 days. According to Sycamore, Bitcoin prices will be in a state of increased volatility for the next 36 hours.
Paradigm's Anand Gomez points to a significant disappointment among cryptocurrency market participants. Another attempt to set a new all-time high for Bitcoin has failed, and investors are already moving their capital into other assets. Gomez maintains a long-term positive view on the main cryptocurrency, but at the moment there are more conditions for the continuation of the correction than for a new wave of growth.
In today's trading Bitcoin rate broke through the level of 69000 without significant problems, which indicates the strength of the downward movement. The next target for the bears should be the 66500 level.
Consider the following trading strategy:
Sell BTCUSD in the range of 67500–68000. Take profit – 66500. Stop loss – 69000.
Traders may also use a Trailing stop instead of a fixed Stop loss at their discretion.
This content is for informational purposes only and is not intended to be investing advice.
