The Bitcoin-to-dollar exchange rate on Tuesday dropped 1.69 percent from 6734-fiat to 6620-fiat after confirming a bull trap.
The current market volume is lower than expected to excite a steady upside – even downside. In our previous analysis, we had stated that a breakout would be confirmed once we climb over September 5 high. BTC/USD managed to test the level in yesterday’s upside action but didn’t see as many open long positions as closed ones. That said, 6734-fiat is already a level to watch out for to confirm a short-term break towards September high.
Bitcoin, meanwhile, seems to have found a bottom as predicted by the many institutional investors last week. The lack of a substantial volume upside is matched equally by an absence of bears. So far, the market has seen big players hinting their long positions by entering somewhere above the $6,000-mark. Incidentally, the level signifies a breakeven return of investment for miners, a network of machines running the Bitcoin network after investing sums in high-end mining machines, space, and electricity.
On daily charts, BTC/USD is still attempting a steady breakout but ends up in a bull trap signal on every jump. The yesterday’s upside closed below resistance and formed a red candle, indicating a false breakout signal. The pair’s upside is capped by a medium-term descending trendline (adjusted after the recent growth) and an equally persistent rising trendline is providing the support.
The fundamentals and technicals collaborate to offer a medium-term bullish bias. In the meantime, day traders are getting enough intrarange opportunities to enter/exit their positions on minor profits.
On 15m charts, BTC/USD is attempting to close above 61.8% Fibonacci level of the last swing from 6548-low to 6712-high. Targeting the falling descending trendline our primary upside, we will initially open a long position towards the 50H SMA coinciding with 6651-fiat while maintaining a stop loss order just 3-pips below the entry level. It should get us some decent profits with minimal risk.
Looking the other side, we might be looking at a Head & Shoulder formation where the price would target 6586-fiat as the neckline. That said, a close below the previous low could have us enter a short towards 6586-fiat. At the same time, we will open a stop loss order above our entry position – 3-pips will be enough to minimize our risks.
Featured Image from Shutterstock. Charts from TradingView.