Bitcoin spent its Sunday reclaiming its support near $6,500 after witnessing a false breakout action yesterday.
The BTC/USD, in reality, is stable like it was the previous week. The pair kicked off today by correcting lower from the last short-term upside and false breakout range as discussed in this analysis. It eventually formed lower lows towards 6525-fiat and reversed up to 25-pips in an upside correction action. The price behavior throughout yesterday and today once again confirmed the presence of trading bots on crypto exchanges. However, BTC/USD returned to its stable range and is once again retesting its previous support/resistance levels.
The latest price action has brought BTC/USD inside its current triangle pattern. We have adjusted the upper trendline to make it precise with the recent lower highs formed during the pullback action from 6741-peak. We are now seeing bulls finding a stable support level above 6500-fiat, and a clear upside target in sight on a pullback is the upper trendline of the triangle formation, coinciding with 6600-fiat for now.
The RSI indicator and Stochastic oscillator both are looking at a smooth near-term uptrend ahead, which could mean BTC/USD will attempt a breakout action again. If it does, the pair will also go above its 100H and 200H SMAs to indicate a positive bias in the market. The only catch is low volume, which means Bitcoin will remain in a bias conflict while bringing intrarange opportunities in near-term.
The range we are watching today has 6525-fiat acting as interim support and 6606-fiat acting as interim resistance. We have already entered a long position towards resistance on a bounce from support, and a close above resistance will also have us enter a long entry towards 6638-fiat, the upside target in our false breakout area. On both the upside positions, our stop loss will be maintained 4-pips below the entry position to minimize our risks in case a pullback action appears.
Looking the other way, a pullback action, as mentioned above, will have us put a short position towards the support as a part of our intrarange strategy. A close below the support level will also open a decent short position towards 6500-fiat. In these positions, a stop loss somewhere 4-5 pips above the entry position will define our risk management perspective.
Meanwhile, we’ll be watching a newly formed ascending trendline in black as a potential pullback level. We could see its use in our future updates.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 5:10 PM