Bitcoin on Monday depreciated more than 2 percent against the US Dollar from its bear flag top from Saturday.
The BTC/USD kickstarted Asian trading session by consolidating sideways near-term between 6688-low and 6722-high. The pair in the absence of upside sentiment started losing positions to shorts. As a result, it fell as low as 6580-fiat at the beginning of the European trading session. Ever since, BTC/USD is attempting a weak bounce back, valued above 6600-level at the time of this writing.
The BTC/USD expects to either consolidate sideways in medium-term or continue its downtrend concerning the current descending trendline. As long as Bitcoin stays capped under the falling trendline, we cannot stop being bearish. It guarantees a downtrend towards our 9-month bottom around 5785-fiat, where we could find some bull whales, after all, to create long opportunities towards the falling trendline.
A consolidation pattern, in the meantime, could put us inside a channel defined by 6851-fiat as resistance and 6113-fiat as support. As we have just reversed after forming a bear flag top, short sentiments toward the support could prove higher, which would have our RSI indicator and Stochastic oscillator take a drop towards their respective selling regions. The bias, in the meantime, would remain bearish, also because the 50H, 100H, and 200H MAs will be way too above the BTC/USD value.
That’s Bitcoin for you long-term.
According to out intraday strategy, we are already in a short position towards the recently tested interim support near 6580-fiat. A breakdown scenario below the level would have us extend our short position towards 6500-fiat, our psychological downside target. In this position, a stop loss somewhere 2-pips above the entry point will define our risk management perspective.
Conversely, if price bounces back from support, we’ll put an immediate long towards 6637-fiat, our interim resistance, while eyeing a pullback to repeat our position towards the interim support. Anyway, we will still be expecting a breakout despite being bearish (nobody can trust the price action of Bitcoin). Should it happen, we’ll put an extended long position towards 6672-fiat in hope to exit it on a decent profit. A stop loss, meanwhile, somewhere three-pips below the entry point will ensure our losses are minimized.
Featured image from Shutterstock. Charts from TradingView.
Last modified: September 24, 2018 18:36 UTC