The bitcoin price on Tuesday nursed extensive losses of over 12 percent against the US dollar, stabbing through $5,000 as it did.
BTC/USD Intraday Analysis
The BTC/USD index is currently trading at the 4513-fiat price level after a minor jump from its intraday low at 4035-fiat. The knee-jerk reaction after a massive sell-off does not confirm a substantial bias shift. It looks more like a bear pennant formation that is likely to extend the bearish action as it overreaches its downside targets.
The little rise we are looking at could just be traders closing their short positions. It doesn't guarantee any substantial accumulation. The BTC/USD rate, therefore, could consolidate for a while before forming another bearish flag, this time targeting new supports for a potential reversal.
Indeed, the world's leading digital currency is behaving like a reckless altcoin after weeks of stability. It doesn't leave retail investors with any choice but to wait for things to settle down. Analysts are calling the bottom like they always do, but real accumulation could only appear when big-pocket bulls buy the dip. The events taking place in the bitcoin cash market are leaving investors no choice but to wait.
Our intraday analysis, therefore, can only provide for day traders willing to catch the falling knife. Approach with caution.
As BTC/USD forms a bearish pennant, we are testing its levels as a sign for out breakout/breakdown targets. That said, a jump above the upper trendline could have us enter a long position towards 4797-fiat. Similarly, slipping below the lower trendline could allow us to watch 4313-fiat as our short target. In both places, we are maintaining our stop losses tightly -- just 2-pips opposite the direction of the price action would be enough to define our risk management perspective. Period.
Bitcoin Price Weekly Outlook
A weekly chart provides us with a better outlook of how bitcoin could behave in the future. With Bakkt delaying its launch, the market has every reason to test the lower trendline of the falling wedge pattern. That somewhat coincides with levels around $3,500, a prophesied bottom. Breaking below it would put pressure of calling bulls on 2982-fiat, a level that had a decent historical significance during the August-September 2017 session.
Meanwhile, the RSI is already oversold, and the Stochastic Oscillator could join the club if BTC/USD dips any further. The RSI, in particular, has never been inside the oversold area, barring the initial days of trading. Traders can be hopeful of a recovery -- but not sure.
The technical definition of a falling wedge pattern also indicates a breakout session to the upside. Therefore, the BTC/USD pair should consolidate inside the range and ultimately attempt a breakout to as high as 7500-fiat.
Until then, we are speculating highly on the events from the mainstream space. Weak dollar, interest rate hike, bitcoin ETF, Bakkt, and even a financial meltdown -- the holders have enough reason to speculate on the market that is just maturing.
Featured Image from Shutterstock. Charts from TradingView.