Bitcoin on Sunday jumped 2.13 percent against the US Dollar as USD-pegged cryptocurrency tether (USDT) resumed its implosion.
BTC/USD was in a sideways sentiment for most of the weekend trading session. The bearish trendline has capped the upside bias on multiple occasions. Nevertheless, the pair — from the past 8 hou rs to the time of this writing — has persuaded a successful breakout action, breaking the cap mentioned above and forming new intraday highs towards 6464-fiat. At the same time, CoinMarketCap.com is showing a massive drop in Tether value — about 4 percent — mirroring the scenario of the October 15 trading session that prompted a massive upside rally throughout the cryptocurrency market.
The breakout action has allowed BTC/USD to retest October 24 high towards 6470-fiat while jumping above the pair’s 100H and 200H simple moving averages. The RSI momentum indicator has also jumped towards a favorable buying area owing to the recent upside volatility. And, the Stochastic Oscillator is already inside its overbought area, awaiting correction.
The BTC/USD price action is also forming a rising channel (the dotted one) as of now, with a particular tendency to treat the lower black-dotted trendline as support. If the pair continues the uptrend, one might check the said ascending dotted support line as a potential reversal target off every near-term downside correction.
Nevertheless, BTC/USD is already in a breakout action following the invalidation of the descending trendline depicted in blue. There could still be a bull trap possibility so placing a stop loss to maintain every long/short trade would be advisable.
We have exited our long position towards 6421-fiat on considerably moderate profits and are now entering a new range defined by the Fibonacci retracement swing from 6032-low to 6810-high. The new range has 6421-fiat acting as a new interim support and 6470-fiat as the intermediate resistance level with a sight towards 6513-fiat as the potential interim resistance.
As usual, we are first entering a long position towards 6470-fiat while maintaining a stop loss 3-pips below the entry point. A break above the said long target would have us open another upside position towards 6513-fiat. In this position, a stop loss order just 3-pips below the entry point will define our risk management strategy pretty well.
Conversely, a pullback action makes the lower dotted rising trendline our most likely support level. That said, we’ll enter a short position towards this said level while maintaining our stop loss 2-pips above the entry point. If the lower trendline gets broken during an extended bearish correction action, then 6300-fiat will become our primary downside target.
Featured Image from Shutterstock. Charts from TradingView.