Bitcoin started this week on a bearish note, depreciating more than 2 percent against the US Dollar on a low-volumed Monday.
BTC/USD is undergoing a reversal from its previous week’s high near 6828-fiat. The pair initially formed lower lows below 6500-fiat, but later reclaimed the level as support in an upside correction phase. Even today, BTC/USD has tested 6500-fiat as support at least twice already. But, the area has bulls entering long positions towards expected upside targets. Breaking below it can have a psychological but unexpandable impact on the market. Nevertheless, we are now in a retracement mood.
The BTC/USD price action is squeezing in towards the resistance of our month-long triangle range. So, far, we have seen a breakout rejection near 6828-fiat. And as long as we stay above 6500-fiat support level, we have a chance to reclaim 6700-fiat as our intermediary long target. Sentiment-wise, BTC/USD has is trapped between a range defined by 50H SMA to the upside and 100H MA to the downside, with 200H MA only arm lengths away to the price’s north.
The RSI is looking to find some support near 28, but a breakdown towards much-more serious selling area should not surprise. The Stochastic Oscillator also has its head towards the downward direction, and the best we can expect from here is BTC/USD approaching 6659-fiat, and reversing as a part of correction from Stoch overbought threshold – towards 6500-fiat again.
The bias looks bearish now, a change from what it was during the weekend.
As BTC/USD tests 6500-fiat as support, it has also influenced us to treat the level as our interim support. To the upside, 6659-fiat is presenting a solid case for being our interim resistance level for the rest of the day. That said, we will be watching the said range to decide on our intrarange and breakout positions.
We have entered a long position towards interim resistance already on a bounce back from 6500-fiat as a part of our intrarange strategy. A stop-loss order at 6495-fiat is also in place to minimize our losses should the near-term upside reverses.
If we are able to draw out profits from our long position, and BTC/USD also breaks above interim resistance, we will waste no time in entering another long position towards the resistance of our triangle range. Putting a stop loss just 4-pips below the entry level will be a good risk management strategy.
Nevertheless, at where we are, we can also expect BTC/USD to draw out from its upside correction and fall back towards 6500-fiat. Currently, we are not entering a short towards 6500-fiat yet but a breakdown scenario could have us put a short towards the next downside target, near 6423-fiat, our 23.6% Fibonacci level. A stop-loss three-pips above will protect our trade.