After slipping to its intraday low around $6,217, Bitcoin recovered as much as 4 percent on Thursday.
Comparing to the very recent price action, Bitcoin seems to have overstayed in the $6450-6500 area. In medium-term, the price is forming poles of bear pennants every other day. But, for now, it looks like Bitcoin is in the mood to hold its gains after all. The Asian trading session today has displayed a fair buying sentiment – just like yesterday – but the upside slowed down at the beginning of the European session.
Now, the price is supported by a short-term ascending trendline, preparing the price to attempt some more actions towards the north. As the US session begins, let’s have a look at the indicators to understand the bias we are looking at for the rest of the day.
The BTC/USD is now consolidating sideways amidst a low volume day. The pair has jumped above its 100 and 200H moving indicators following a retracement attempt from 6127-fiat, giving us a moderate buying sentiment, to begin with. The RSI and Stochastic indicators are both in neutral areas, indicating an idle position of the market.
We are closely watching the ascending line (depicted in orange) as a border between near-term bullish and bearish trend. The bias conflict will intensify if BTC/USD continues to flirt with it, as it is happening at the time of this writing. A break below, and we’ll look towards further consolidation or a full-blown downside action. A slow upside action might test intraday traders’ patience anyway, and we should break below it. Nevertheless, there is a moderately strong support area waiting to be tested around 6189-fiat, which could entice a bounce back, this time towards 100H MA as potential resistance.
Like always, we will be confining our strategies based on the range we have entered. So today the range we are watching is defined by 6293-fiat as interim support and 6458-fiat as interim resistance. Just to add, we are already long towards the 6458-fiat on a bounce back from support. And if we manage to touch the level, we will first wait for two possible outcomes: a breakout in which price breaks above resistance, or a pullback towards the orange ascending line. Our bias is towards a pullback.
So, with that being said, if upside reverses and manages to break below our ascending line, then we’ll put a short towards 6293-fiat while keeping our stop loss 2-pips above the entry position. A further break and we’ll put another short position towards 6218-fiat, our primary downside target. In this position, a stop loss at 6297-fiat will define our risk.
Looking at the second scenario, if price breaks above 6458-fiat, then it will make a smooth path for our long position towards 6500-fiat. There is a strong selling pressure around 6500-6500 area, which could influence us to avoid placing any new position.
Featured image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 6:06 PM