This week, two major central banks are on the economic calendar. The Fed will release its interest rate decision tomorrow. If the predictions materialize, it could put a damper on bitcoin’s (BTC) bull run.
Towards a rising dollar?
Bitcoin (BTC) starts the week in the red, falling 5% on Monday. With the intervention of the Federal Reserve on the economic calendar, this could continue. Indeed, forecasts show an increase in the Fed’s key rate by 25 points. If this is confirmed, the dollar will probably gain strength. Which is going to be against the crypto markets. We thus envisage a bull run for the dollar and a fall for bitcoin (BTC) this week. Crypto traders will be able to take advantage of this decline by taking short positions.
In addition, we should expect high volatility this week. Indeed, two major central banks will shake the markets this week. In addition to the Fed, the European Central Bank (ECB) is also there. Even though the Euro is not directly linked to bitcoin (BTC), it could still have an impact on its value.
A short position on bitcoin (BTC)
Given this increase in the interest rate, we are thus considering a correction on the leader of cryptos. Indeed, several bearish signals are showing on the bitcoin (BTC) chart. In particular, there is the appearance of an RSI divergence on the hourly and daily chart. This is a very relevant trend reversal signal. Effectively, this shows that the upside pressure is diminishing, and that a potential decline is coming. Then, yesterday’s decline allowed bitcoin (BTC) to break through the 200 hourly moving average. Which is also a short-term trend reversal signal.
Thus, with all these signals, we are considering a drop in bitcoin (BTC) for the next few days. Here is a short position that could be profitable in the short term. The entry point will be placed at $23,500 and the stop loss slightly above yesterday’s high. The TP1 target (the safest) could be placed on the $21900 level.
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