The pair will likely hold steady as bulls target the next key resistance level at 50,000 in the coming days.
- Buy the BTC/USD pair and set a take-profit at 50,000.
- Add a stop-loss at 46,000.
- Lead time: 2-3 days.
- Set a sell stop at 45,760 and a take profit at 42,000.
- Add a stop-loss at 48,000.
BTC/USD’s dramatic comeback accelerated Tuesday morning as US bond yields fell and on-chain metrics improved. The pair hit a high of 47,600, which was the highest since January of this year. It is up more than 45% from its year-to-date low.
US bond yields have fallen
Bitcoin and other cryptocurrencies have performed relatively well even as warning signs of a recession emerged. On Monday, the yield curve inverted for the first time in years. This happened as aggregate bond yields on short-term government bonds rose above longer-term ones. Normally, investors demand a higher premium for longer-term bonds.
Historically, a reversal in bond yields is usually an indicator that a recession is imminent. In most cases, it may take several months or years for a recession to set in. The yield curve has been one of the best predictors of recessions in recent years.
The BTC/USD pair also rose as investors gauged increased demand for Bitcoin amid rumors that Russia was considering accepting oil and gas payments in the currency. These rumors have yet to be confirmed. If they are, they could be a game-changer given that Russia is one of the largest producers and exporters of oil and natural gas in the world.
Meanwhile, on-chain data is still supporting Bitcoin. According to Glassnode, Bitcoin whales have continued to accumulate Bitcoin over the past few weeks. In particular, the amount of releases was somewhat limited. Whale activities are usually closely watched by investors.
Other on-chain metrics, such as the number of active addresses, have increased as transactions have increased over the past few days. FX balances also continued to rise as the hash rate increased.
The daily chart shows that the BTC/USD pair has been in a strong uptrend over the past few weeks. It managed to break above the important resistance level at 45,760, which was the February high.
The pair also managed to move above the 25 and 50 day moving averages and is now near the 50% Fibonacci retracement level. It also moved slightly above the ascending trendline shown in black.
So, the pair will likely hold steady as bulls target the next key resistance level at 50,000 in the coming days.