Bitcoin on Friday broke above its psychological resistance level near $6,500 and formed higher highs towards $6,600.
The BTC/USD kickstarted the Asian trading session with an impressive rally from 6462-fiat to 6595-fiat. However, the pair failed to sustain the upside momentum near the new resistance and retraced back towards 6400-fiat. As it happened, BTC/USD made lower lows towards 6355-fiat during the early European hours. The session matured with pair attempting a decent bounce back towards the level just shy of 6500-fiat – our make-or-break level from August.
As the consecutive upside and downside action prevails, BTC/USD is already forming an irregular rising wedge pattern in near-term. The gap between the upper and lower trendlines is not significantly wide – about $150-180 – but could provide decent entry/exit positions to watch out. It somewhat is a part of our intraday strategy, but more on it after we go through the technical indicators’ mood for the rest of the US session.
The BTC/USD is currently trending between its 50H and 200H moving average indicators while remaining distantly below the 100H SMA. The fact that 50H SMA is trading below its 100H and 200H counterparts itself points to a medium-term bearish bias in the Bitcoin market. It should continue to remain in one until BTC/USD breaks above the resistance of the giant falling trendline. A rally towards 7000-fiat is possible, after all, before BTC/USD gets to a choice between a breakout and a pullback.
At the same time, the pair gets support from a rising trendline forming since early May – a potential pullback level should BTC/USD forms a bear pole with respect to its overall downside action. The RSI and Stochastic indicators have hinted a downside correction already.
As far as our intraday analysis is concerned, we are waiting for BTC/USD to break above 6500-fiat to clear our long target towards 6600-fiat. Should we enter this position, a stop loss just two-pips below the entry point will define our risk management perspective pretty well.
6500-fiat is also a level that keeps us in near-term bias conflict. Hence, we will also be expecting a pullback which would have us enter a short towards the 200H moving average – coinciding with the 38.2% Fibonacci retracement level of the last swing from 6203-low and 6578-high. In this position, we will be placing our stop loss 3-pips above the entry point to exit the market on a small loss if bias reverses.
Featured image from Shutterstock. Charts from TradingView.