Bitcoin continues to extend its downward momentum on Tuesday, lately falling to its lowest trading since June this year.
The BTC/USD today opened at 6250-fiat and started recording losses thereafter – during the early Asian trading session. The pair formed a bear pole in pursuance of a breakout towards the south, as we had predicted in our previous analysis. It broke towards 5857-fiat, just shy of extending its bear run towards the June’s bottom at 5754-fiat.
The European trading session brought some corrective action to the market. But the upside continues to be so weak that it might not stay for dinner. The only good thing to take from the Bitcoin price action in the last 24 hours is that its losses are far lesser than the rest of the cryptocurrency market.
So, with that said, what are we expecting today from this long-term bearish market, let’s discuss.
BTCUSD Technical Analysis
The BTC/USD is now exposed to an extended decline, as can be predicted by the head and shoulder pattern in the chart above. We have just broken below the neckline level of the H&S pattern at 6084-fiat, and are now struggling for a solid upside correction. The price action, thus, is giving us scary downside projections for the days ahead, where BTC/USD could remove another $500 from its current value if it fails to hold itself above the neckline level, or gets stuck inside the downward trendline depicted in orange.
The 100H MA slipping below the 200H MA, coupled with RSI and Stochastic indicators in the strong selling regions, further reflects a strong bearish bias in the market. Long and medium-term traders should prepare themselves for larger declines.
BTCUSD Intraday Analysis
The latest BTC/USD action has brought us inside a new range, which is defined by 6180-fiat as our interim resistance and 5857-fiat as our interim support level. There is still room for smaller recoveries thanks to RSI and Stochastic indicators almost bottoming out. So a correction could bring some achievable upside targets in plain sight. Let’s start with our breakout positions.
We will first be waiting for the price to go above 6180-fiat and clear a path of least resistance towards 6288-fiat, our primary upside target. Nevertheless, realizing the overall bearish bias of the market, we will put a stop loss a 4-pips below our entry position to minimize our losses in the event of a near-term trend reversal.
Similarly, if the price falls down from here, and breaks below the 5857-support, then we will put a short towards the June’s low at 5754-fiat while keeping our stops a two-pips above the entry position.
The pretty wide gap between our support and resistance also makes decent intrarange opportunities. With that said, a pullback from 6180-fiat will have us test 5857-fiat as our potential downside target, and a bounce back from 5857-fiat will allow us to put a long towards 6000-fiat, to begin with.
Featured image from Shutterstock. Charts from TradingView.