The bitcoin price on Wednesday plunged as much as 4.3 percent as the market continued to erase gains made during the weekend trading session.
The BTC/USD index on Coinbase today established an intraday low at 3663-fiat after the 50-period moving average on the hourly chart capped the upside attempt. The pair nevertheless is trending inside two distinctive channels. As noted in our previous analysis as well, one of these patterns is a symmetrical triangle (depicted in bold purple). BTC/USD is testing the triangle support at the time of this writing with a 50-50 chance between a bounce back and an extended selling action.
However, it is the second pattern that is hinting that the bitcoin price will fall even further in near-term. Depicted in purple dots is a falling wedge scenario. According to this channel, the pair may attempt to retest its 2018 low at $3,455. The market could witness a rebound action near the said downside target, but even a breakout scenario could find it difficult to establish a sustainable bullish correction.
Coming back to our symmetrical triangle, a hint of a reversal from its support could merely have the bitcoin price target 50-period SMA as resistance while eyeing the triangle resistance to the upside. In either case, the upside action could validate the falling wedge formation, which traditionally results in a breakout action.
As far as technical indicators are concerned, the BTC/USD market is pretty bearish as of now. The RSI momentum indicator is on the verge of slipping into its oversold area, and the MACD indicator is already trending inside the negative territory.
BTC/USD Intraday Positions
The range we are watching for today has 3588-fiat serving as interim support and 3900-fiat as interim resistance. It is a pretty wide range to apply our intrarange strategy. That means entering a long towards the resistance level on a bounce back from the support level and entering a short position on a pullback action from the resistance. As we do, maintaining a stop loss order just $10 in the opposite direction of the price action would protect our risks.
The technical indicators tell that BTC/USD bearish action should continue. Therefore, we will keep our eyes on the potential short targets more than the long targets. If the pair breaks below the dotted wedge support, it would have us enter a short towards 3588-fiat while maintaining a stop loss just $10 above the entry position. A further break below the said level would have us go into an idle state while expecting the invalidation of this year’s low.
Featured Image from Shutterstock. Charts from TradingView.