BTC/USD Forex Signal: Double-Top Pattern Forms

Bearish view

• Sell the BTC/USD pair and set a take-profit at 19,970.
• Add a stop-loss at 21,000.
• Timeline: 1-2 days.

Bullish view

• Set a buy-stop at 20,800 and a take-profit at 21,500.
• Add a stop-loss at 19,000.

The BTC/USD remained in a consolidation phase after staging a strong comeback last week. Bitcoin was trading at $20,653, which was slightly below last week’s high of $21,000. It remains about 13.90% above the lowest level this month.

Bitcoin recovery fades

The BTC/USD price made a strong recovery last week as global sentiment improved. Its bullish comeback coincided with a sharp decline in the US dollar and the strong stocks comeback. The US dollar index slipped from a high of $115 to about $110.

At the same time, American stocks continued rising, with the Dow Jones, S&P 500, and Nasdaq 100 indices soaring by more than 2% on Friday. Stocks rallied as American companies published mixed quarterly results.

According to FactSet, about 52% of all companies in the S&P 500 index have published their results. Of these firms, 71% of them published a positive EPS surprise while 68% had a revenue surprise. The blended earnings growth was 2.2%, the slowest growth since 2020. Tech giants like Meta Platforms, Amazon, and Alphabet disappointed.

The BTC/USD price rose after Elon Musk concluded his acquisition of Twitter, the giant social media company. He acquired the company for over $44 billion in cash. Investors believe that his purchase is a bullish thing for Bitcoin and Dogecoin since Musk is bullish on Bitcoin.

Bitcoin also rose as investors started pricing in a situation where the Federal Reserve starts pivoting its monetary policy. Expectations are that the Fed will hike interest rates by 0.75% this week and signal that it will start slowing the pace of hikes in the coming months.

Still, some analysts believe that investors are getting ahead of the Fed. Besides, inflation remains at an elevated level and the economy rebounded in the third quarter.

BTC/USD forecast

The BTC/USD price made a strong recovery last week as it managed to move above the key resistance level at 21,000. The pair managed to move above the key resistance level at 20,000 and the 25-day and 50-day moving averages. It has moved above the 25-day and 50-day moving averages.

However, the pair has formed a double-top pattern whose neckline was at 19,968. A double-top is usually a bearish sign, Therefore, there is a likelihood that the pair will continue falling as sellers target the next key support level at 19,500.

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