The Bitcoin’s sideways action is gaining strength in what has so far been a quiet month. However, the digital currency, unlike its mainstream cousins, is displaying adequate volatility for day traders to enter and exit positions on attractive intraday profits.
The focus remains firmly on the Securities and Exchange Commission’s take on the nine Bitcoin ETF applications it has received. Speculators believe the US regulator would eventually approve one of these drafts. The factor alone could be influencing traders to hold their aggressive short entries. Significant monies are not going outside the market lately, and bulls are pretty active around nearby support levels, leading to an extended consolidation action.
BTC/USD is evolving its bounce back action above its 100 and 200-period simple moving average, indicating another upside run towards the descending trendline formation. As it does, it could complete a reverse head-and-shoulders formation with the neckline jammed towards 6725-fiat. In medium-term, the price action remains bearish unless it breaks above the bull trap area. So far, BTC/USD has reversed after testing a stronger resistance cap thrice in the last 30 days.
The RSI indicator and the Stochastic Oscillator also point to an upside action in near-term, meaning attractive intraday long targets for day traders.
The range we are watching for our intraday strategy today is defined by, 6725-fiat and 6521-fiat as interim resistance and support, respectively. We have entered a long position towards 6725-fiat on the close of the previous candle, expecting an extended bounce back action. As keep this position open, a stop loss order 4-pips below the entry point expects to minimize our losses if the action reverses.
Similarly, a pullback from the support level would have us enter a short towards resistance as a part of our intrarange strategy while a stop loss order 3-pips above the entry point will protect our risk.
Nevertheless, a hint of a breakout action above 6725-fiat could have us treat 6826-fiat as the next primary upside target. An extended action above the resistance, therefore, would open our longs towards 6826-fiat, and a stop loss 3-pips below the entry position will define our risk management.
Conversely, a break below support will open our short position towards 6339-fiat, our downside target. A stop-loss 2-pips above the entry position will minimize our risks.
Featured Image from Shutterstock. Charts from TradingView.