The bitcoin price on Sunday paused its upside momentum to trend sideways against the US Dollar, fluctuating just about 2 percent between the trading range.
BTC/USD over the last week had jumped from its previous weekly low near 6125-fiat to a new weekly high near 6840-fiat. Over the course of last 24 hours, the pair only managed to secure its recent gains while avoiding any bearish pullbacks. That said, the Asian trading session saw minimum momentum, a sentiment that rippled through the entire European trading hours. BTC/USD only formed lower low once towards 6500-fiat, but the pair’s imminent recovery confirmed the presence of long position traders.
Bitcoin has just attempted a successful breakout from an inverse head and shoulder pattern whose neckline was near 6551-fiat. A buy stop order above the neckline could have brought some decent profits to day traders. Overall, the breakout signals a sharper move to the upside, if not proven false by strong crucial resistance levels ahead.
BTC/USD today is capped by an interim resistance level near 6788-fiat, as it looks forward to sustaining its upside momentum. There is already an established bullish bias supporting the continuation of the prevailing uptrend. For instance, the 50H SMA has crossed above its 100H SMA, a crossover which indicates a near-term buying sentiment. The Stochastic has slipped from its overbought positions on the 4H chart, which could mean price retesting the neckline of the previous inverse head and shoulder as support while eyeing the ascending trendline as the potential downside target.
Let’s look into our intraday prospects to understand the price action further.
The range we are watching for today is defined by 6788-fiat as our interim resistance and 6642-fiat. There is enough room for intrarange action, so we’ll put a long towards resistance on a bounce back from support, and a short towards support on a pullback from resistance. In the event of a breakout action, such that either of the range parameters get broken, then we’ll switch to our breakout strategy. That said, a break below support would have us put a short towards 6551-fiat while keeping a stop loss 2-pips above the entry point — to minimize our losses in case the pair bounces back. A further break below 6551-fiat would have us apply the same short strategy towards the ascending trendline.
Similarly, a break above resistance would have us put a long position towards 7000-fiat, while a stop loss somewhere 3-pips below the entry point will define our risk.
Featured Image from Shutterstock. Charts from TradingView.
Last modified (UTC): September 23, 2018 19:34