The Bitcoin-to-dollar exchange rate consolidated sideways as an extension to its intraday stable action.
The pair seems to have found a decent support above 6400-fiat, but an equally stubborn resistance near 6530-fiat is holding its gains. Currently, BTC/USD is trading at 6439-fiat, down 0.54 percent from the previous day’s close. On the fundamental front, Fidelity, a multinational financial service with a Wall Street status, has revealed its plan to commit its Bitcoin trading plans for hedge funds. The event attests to institutional investors’ growing interest in adding digital currencies to their portfolios. Bulls have already called for $6,000 as a potential bottom.
There is, however, some resistance Bitcoin faces in the name of regulations and economists’ growing negative sentiment against it. A big amount if waiting to enter the crypto market if only the backers think they are protected by regulations. On the other hand, economists’ unresearched comments on the digital currency discourage potential investors from entering the market as a whole.
After the Tether confusion, the BTC/USD finally has a reason to look back to its long-term descending triangle formation. The pair is once again testing the upper trendline for a potential breakout or reversal. But a balanced action could have us look at a bull trap formation above the upper trendline, meaning a breakout that would eventually be proven false. The market currently lacks fuel that could allow traders to enter long positions near the bull trap zone.
The bias is also favoring bears for today. BTC/USD is trading below it’s 100 and 200H simple moving averages, and the upside action of both the RSI and the Stochastic Oscillator is slowing down. Maybe, a strong potential reversal should follow suit after validating the upside caps.
On hourly charts, we are looking at a decent support towards the near-term ascending trendline formation. BTC/USD is now trading inside a narrow range defined by 6465-fiat as its interim resistance and 6406-fiat as its interim support. It allows us some room to apply our intrarange strategy in place. That said, a reversal action from the resistance would have us open a short position towards the support, and a close above the support will have put a long position towards the resistance.
A breakout action when the price breaks above resistance will have us treat 6550-fiat as our primary upside target. A break above 6550-fiat should confirm a near-term bullish bias that could allow a decent long position towards 6659-fiat. Then again, we would still be inside a bull trap.
Looking the other way, a breakdown action, such that the BTC/USD breaks below its interim support level will have us put a short entry towards 6346-fiat, our intermediate downside target with a sight towards the near-term ascending trendline.
On all our positions – long or short – we will put a stop loss 3-pips against the direction of price action, which should minimize our losses.
Featured Image from Shutterstock. Charts from TradingView.