BTC/USD Forex Signal: Bitcoin Could Soon Move Below $20,000

Bearish View

• Sell the BTC/USD pair and set a take-profit at 20,000.

• Add a stop-loss at 24,000.

• Timeline: 1 day.

Bullish View

• Set a buy-stop at 23,500 and a take-profit at 25,000.

• Add a stop-loss at 20,000.

The BTC/USD pair remained under pressure as investors waited for the upcoming interest rate decision by the Federal Reserve. It is trading at 21,500, which is higher than the intra-week low of 20,896. It remains sharply below its all-time high of near $70,000.

Cryptocurrencies Pressured

Bitcoin and other cryptocurrencies have been under intense pressure this week as investors continue reflecting on last Fridays consumer inflation data.

The numbers showed that the countrys consumer price index (CPI) surged to a 41-year high of 8.6%. Beneath the headline number, data showed that other parts of the economy continued experiencing a higher inflation rate.

For example, gasoline prices have more than doubled in the past 12 months. The prices of other food items like eggs and meat have also risen by over 30%.

Therefore, the role of Bitcoin - and gold - as inflation hedges has been invalidated as their prices have continued falling.

The next key catalyst for the pair will be the upcoming interest rate decision by the Federal Reserve. With inflation surging, analysts believe that the FOMC will hike interest rates by a whopping 0.75%. If his happens, it will be the biggest increase since the Volker era.

The BTC/USD pair is also struggling as companies in the industry struggle. Celsius, a leading crypto lender paused withdrawals and swaps. Similarly, companies like Coinbase, BlockFi, and Crypto.com have all announced that they will cut jobs in the coming weeks.

Most importantly, some of the best-known crypto advocates like Jack Dorsey, Michael Novogratz, and Michael Saylor have all remained silent amid the freefall. There is also rising fear that MicroStrategy could receive a margin call if Bitcoin continues falling.

Still, with Bitcoin nearing its 2017 high, there is a likelihood that it could see a temporary relief in the near term.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD pair has been in a strong bearish trend since November last year. It managed to cross the important support level at $25,361, which was the lowest level on May 12th.

The pair remains below all moving averages and it is forming a bearish flag pattern. Therefore, the likely scenario is where it makes a strong bearish breakout as investors target the support at 20,000.