Bitcoin on Tuesday extended its downward momentum, dropping 0.67-percent against the US Dollar.
The BTC/USD trading pair opened the Asian trading session at 6288-fiat and attempted an upside correction to as high as 6309-fiat. The selling pressure around the 6309-level resumed the downtrend. As a result, the pair kept forming red candles for the rest of the Asian and European trading session. It is now trading at 6294-fiat.
The macroeconomic view of the US Dollar posted bullish sentiment for the currency. But it is not looking the same today. The greenback is poised to post losses before the market closes as European currencies rebound. The ICE dollar index was noted to be down 0.1 percent as the market opened today.
A weaker dollar on an intraday basis can reinject the BTC/USD market with some upside sentiments. The pair is already forming a falling wedge pattern, indicated by the two unparallel black lines in the chart above. The consecutive swing highs and lows coupled with decreasing volume traditionally mark preparation of a breakout action. That said, BTC/USD should attempt to knock out the upper trendline of the falling wedge pattern and rally towards 6500-fiat as its primary upside target.
The RSI and the Stoch are also signaling an upside movement in BTC/USD price action. Both the indicators are inside their respective selling regions and are eyeing a pullback. In the chart above, a rising red trendline is capping the downside action for now.
BTC/USD Intraday Analysis
Our intraday strategy is keeping our eyes glued on the range, anyway. Today, we have 6374-fiat acting as our interim resistance and 6271-fiat as interim support. It is a pretty broad range to apply the intrarange strategy. That means entering a long on a bounce back from support and a short on a pullback from resistance while maintaining a stop loss order in the opposite direction of the price action.
Looking from the breakout perspective, the price should break above 6374-fiat to enable our long position towards 6406-fiat. If we go ahead with this trade, then we’ll put our stop-loss order just 3-pips below the entry position. Similarly, in the event of a breakdown action, a break below 6271-fiat will have us go short towards 6203-fiat.
Featured Image from Shutterstock. Charts from TradingView.