Fundamental view:

Bitcoin dropped against the US dollar during the trading course of the week and is trading around $40000. The worsening situation in Ukraine is the major catalyst prompting investors towards safe haven asset and pullback from perceived riskier asset – Bitcoin. The Market participants largely ignored the Fed minutes.  Russia deployed troops to the region, and Western nations feared an invasion. Moscow wants Ukraine to be permanently barred from joining the North Atlantic Treaty Organization  (NATO) and want to cease all military activity in Eastern Europe. The West has aligned behind Kyiv, and at some point, Russia announced it would pull back troops, although in reality, it has done the opposite.  Risk off sentiment intensified on the US’s warnings over a potential Russian incursion of Ukraine, weighing on the perceived riskier asset – Bitcoin.

The FOMC meeting minutes was released on Wednesday. Inflation was mentioned 73 times in the text, indeed a record, we do not know how many of the more than 70 people present spoke. Policymakers supported a significant reduction in the balance sheet given its “high level of Federal Reserve securities holdings.”  No indication was given for the timing or size of the expected reduction or whether it might be a passive roll-off or active sales. And no clue was provided to the question,  will the March rate cut be 0.25% or 0.5%. 

The major economic events deciding the movement of the pair in the next week are Fed Governor Bowman Speech at Feb 21, CB Consumer Confidence Index at Feb 22, GDP quarterly report, Initial Jobless Claims, EIA Crude Oil Stocks Change at Feb 24, Core Durable Goods Orders monthly report and Michigan Consumer Sentiment at Feb 25 for US.

BTC/USD Weekly outlook:

Technical View:

Last week’s high was 2.35% lower than the previous week. Maintaining high at 44754.6 and low at 39488.8 showed a movement of 5266 pips.

In the upcoming week we expect BTC/USD to show a bearish trend. The Instrument is trading below the 100 Simple Moving Average and the MACD trades to the downside. Should 38184.7 proves to be unreliable support then the pair may fall further to 36203.9 and 32918.9 respectively whereas a solid breakout above 43450.5 will open a clear path upward to 46735.5 and then will further raise up to 48716.3. In H4 chart rounding top pattern formation favors prospects of a bearish trend. Bearish engulfing pattern constructs a bearish outlook for the pair in the upcoming week.