BTC/USD Forex Signal: Inverse Head And Shoulders Pattern Forms

Bullish view

 Bearish view

 Bitcoin price rose slightly this week after the relatively weak US manufacturing PMI numbers and as risky assets rebounded. The BTC/USD pair rose to the important psychological level of 70,000 for the first time in a week.The price of Bitcoin rebounded as the US dollar index (DXY) slumped after the weak manufacturing PMI report on Monday. According to the ISM, the country’s manufacturing PMI figure dropped from 49.2 in April to 48.7 in May, signaling that the industry was going through a difficult path. A separate report by the Atlanta Fed estimates that the economy will grow by 1.8% in the second quarter. That was a lower estimate than the previous 2.7%. As a result, the US dollar index (DXY) tumbled by almost 50 basis points to $104.12.Bitcoin has an inverse correlation with the US dollar, meaning that the two assets move in different directions. This happens because of the actions of the Federal Reserve, which tends to be hawkish when the economy is doing well.Bitcoin also steadied as animal spirits resumed in the riskiest markets. GameStop’s stock jumped by over 30%, helping other risky assets rise. Meme stocks like AMC Entertainment, Clover Health, and Novavax also jumped. BTC/USD daily chart analysisBitcoin price peaked at 73,810 in March this year as investors cheered the approval of spot Bitcoin ETFs by the Securities and Exchange Commission (SEC). It also rose ahead of the highly-anticipated Bitcoin halving event that happened in April.Bitcoin then tumbled to a low of 56.800 in May as the momentum faded and as it became clear that the Fed will not deliver more rates this year. It has now remained above the 25-day and 50-day Exponential Moving Averages (EMA).The Awesome Oscillator’s bars have turned red and are in a downward trend. At the same time, the BTC/USD pair has formed an inverse head and shoulders chart pattern. It is now nearing the inverse H&S pattern’s neckline.Bitcoin has also moved to the first support of the Andrew’s pitchfork tool. Therefore, the pair will likely have a bullish breakout if bulls manage to push it above the neckline at 71,677. If this happens, it will retest its all-time high at 73,810.On the flip side, a drop below the support at 65,000 will mean that there are more sellers left in the market.More By This Author:AUD/USD Forex Signal: Sits At Key Resistance As Odds Of RBA Rate Hike RiseEUR/USD Forex Signal: Breaks Above Key Resistance LevelsMULN Stock Price Forecast: Is Mullen A Good Buy In May?