The bitcoin price on Sunday surged as high as 7.28 percent against the US dollar ahead of the US session.
The BTC/USD rate is trading at 4158-fiat at press time. The pair is almost completing the formation of an inverse head and shoulder pattern. Its neckline appears more like a near-term falling trendline, capping the strong upside movements lately. The latest jump in BTC/USD has affirmed what bulls are attempting to break at this point. Breaking above the neckline level sets up a run towards 4500-fiat. The resistance level is psychological at best, and its invalidation could also confirm an extended upside action towards 5000-fiat.
As of now, traders can wait for BTC/USD to close above the neckline in hopes to validate if the breakout is valid or false. This strategy can allow traders to go long towards their respective near- or long-term upside targets. Alternatively, traders can also place a limit order at or just below the neckline, so as to get an execution on a bitcoin price rebound.
Other than inverse H&S formation, the technical dynamics of the bitcoin market is mostly bullish in near-term. The BTC/USD pair is trading above the 50-period moving average. The RSI momentum indicator is close to 60, awaiting a jump to validate a stronger bullish bias. The MACD indicator is also inside a positive territory.
At the same time, people may start believing that the bitcoin price has bottomed out. While the market has certainly located a near-term support at 3430-fiat, a bottom cannot be confirmed unless we have a steady break and consolidation period above 4500-fiat.
BTC/USD Intraday Analysis
Coming to our intraday analysis, we are as usual placing our bets based on parameters defined by today's price action. The BTC/USD index is comfortably trending upwards inside a rising parallel channel, giving us cues of potential entry and exit positions on each bounce and pullback action within the zone.
Our interim resistance is currently located at 4244-fiat while our interim support is at 4081-fiat. The latest bounce from the support line has allowed us to enter a long position towards 4244-fiat, according to our intrarange strategy. At the same time, we have placed a stop loss order at 4059-fiat to minimize our losses if the trend reverses.
Upon achieving the intrarange long target, we will put our focus on the channel resistance coinciding with 4351-fiat, our upside target. Thus, a break above the resistance level would have us open a long order towards 4351-fiat. We'll maintain our risk management strategy by maintaining a stop loss order at 4222-fiat to exit the market on a small loss if a strong pullback appears.
Looking to the downside, a break below the channel support would have us enter a short position towards the 200-period simple moving average while eyeing 3951-fiat in the event of an extended breakdown session. A stop loss at 4124-fiat will define our risk management strategy in this position.
Featured Image from Shutterstock. Charts from TradingView.