It is not a new day for Bitcoin speculators, for the prevailing bearish bias in the market has been intensified further following a strong selling round.
The day started with BTC/USD sticking to its chop-mood before invalidating a significant support level at 7814-fiat yesterday. We had discussed two outcomes in our previous analysis following the downward breakout: either, there will a strong pullback to reestablish support near 7814-fiat, or a bearish continuation towards the next downside target at 7459-fiat, coinciding with our 38.2% Fibonacci retracement level. As one can notice in the chart below, the latter happened.
Luckily, we were prepared for this bear-run and had placed an extended short towards 7459-fiat. We exited the position on a decent profit and are now re-evaluating our intraday positions for the rest of the US trading session. But before we dwell into discussing our positions, let’s check out what the technical indicators on 4H BitFinex chart are telling us.
The latest sell-off has undoubtedly turned the market’s mood upside down. The BTC/USD is now in the clear midst of its 100H and 200H SMA. The RSI (at 24.6) and Stochastic Oscillator (at 13.4) are hardly waking up from the oversold region. The market’s mood is bearish, pointing to a near-term selling sentiment.
After drawing profits from the downside trend towards 7459-fiat, we are already re-evaluating our intraday strategy for the rest of this Wednesday. We are now in the midst of a new range, defined by 7459-fiat as interim support, and 7814-fiat as interim resistance. To begin with, it is a $355 wide range which, in line with the high volatility over the past 24 hours, could be a good reason to apply our intrarange strategy.
According to intrarange, we put a long position towards the resistance on the bounce from support. Similarly, a pullback on the resistance influences us to put a short towards the support. Thus, we have already opened a long position towards 7814-fiat, while keeping a stop loss 2-pip below 7459-fiat. On the other hand, if price manages to test the upside and attempts a pullback, a short position towards 7459 would make sense.
In event of either of these levels getting invalidated, we will switch to our breakout strategy. So, if BTC/USD attempts a break above 7814-fiat, it will allow us to consider 8000-fiat as our primary – and psychological – upside target. In this position, we will keep our stop loss 3-pips below the entry level to define our risk management perspective.
Contrary, if the bearish bias extends, and price manages to break below 7459-fiat, we will enter a short position towards the next-and-nearest support line. In this scenario, it is at the 50% Fibonacci retracement level – at 7134-fiat. A stop-loss 3-pips above the entry level will protect us in case the bias reverses.
Featured image from Shutterstock.