The bitcoin price on Wednesday showed signs of recovery after two weeks of massive selling action.
The surged as much as 7 percent to establish an intraday high at 4645-fiat. The pair consolidated above 4500-fiat for a brief time but lost steam ahead of the US trading session, creating lower highs towards 4241-fiat. The likelihood of a further bull correction looks meager owing to trading activity at . The derivatives platform currently dominates and has processed circa $5.3 billion worth of trades. The action shows that traders are willing to short their bitcoins in the futures markets, which could make the digital currency extend its downward trend.
BTC/USD has reversed from the lower trendline of the falling wedge formation discussed in . The interim selling action in the futures market could invoke to retest wedge support, after which the market would have a better probability for a rebound. The RSI momentum indicator has been inside an oversold territory for a while, expecting a future reversal.
BTC/USD Intraday Analysis
As BTC/USD consolidates, forming a bearish pennant, we are looking at the symmetric triangle for potential entry/exit levels. Also, we are testing 4493-fiat as our interim resistance, and 4296-fiat is acting as our interim support level.
We are first looking for a break below the triangle support, which would validate 4246-fiat as our potential downside target. A short position towards the said level looks profitable, but maintaining a loss just 2-pips above the entry level would minimize losses should the downtrend reverse.
Similarly, a bounce back from triangle support will have us put a long position towards 4493-fiat. At the same time, a stop loss order just 3-pips below the entry level would define our risk management in the near-term.
If either of the interim resistance or interim support levels is broken, we will switch to our breakout strategy. That said, a break above 4493-fiat will have us enter a long towards 4568-fiat, while a stop loss just 3-pips below the resistance level would protect our losses. Similarly, a break below the support level will put us on a wait-and-watch approach, because of the market’s inability to find a bottom.
Trade safely!
Featured Image from Shutterstock. Charts from .
Published at Wed, 21 Nov 2018 21:05:54 +0000
