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The price of bitcoins on Friday posted one of the most robust sessions of its downs in weeks, recording a 10.5% rise in just twelve hours.
The exchange rate between bitcoin and the dollar (BTC / USD) peaked at $ 3,710, up 10.38% from the Asian session. It was not a simple technical question. the fundamentals have also played an important role in catalyzing the continued downtrend of Bitcoin.
Robert J. Jackson Jr., commissioner for the United States Securities and Exchange Commission (SEC), said in an interview that the regulator would eventually approve a Bitcoin ETF. The news, it seems, has helped Bitcoin to revive its bullish sentiment.
The BTC / USD is now evolving inside an overbought territory. The pair is expecting a lower correction as the market pulls out of the US session.
Bitcoin broke its balance, but what's going on now?
The falling-corner model mentioned in our previous badysis validated its presence. As CCN reported, the price of bitcoin surpbaded the resistance of the corner and outperformed its bullish momentum by exceeding its 4H200 moving average. As a result, our long positions on daily positions reported a decent profit.
BITCOIN 4H CHART | SOURCE: COINBASE, TRADINGVIEW.COM
However, the rise does not guarantee a long-term bullish recovery. Bitcoin must first establish a support zone to ensure that what we have seen is not a false escape. The current correction leaves us plenty of possibilities, starting with the $ 3,600 level. If this zone is broken down, the price could then target the 4H200 moving average (shown in red) for a potential decline.
BITCOIN 1D CHART | SOURCE: COINBASE, TRADINGVIEW.COM
In the meantime, it is essential to see how the previous formation of falling corners worked for Bitcoin. Between November 24 and December 15, the BTC / USD pair was in a declining range. After reaching the top, the pair attempted a successful evasion operation – also confirmed by an increase in trading volume – to recover $ 4,412. It fell just downward and was down $ 4,235, the level that now serves as an escape target for corner training going on.
Therefore, unless the bitcoin exceeds $ 4,235 – or even $ 4,116 – it would remain, according to our theory, in a false area of escape, which is hardly optimistic.
Bitcoin price: Main levels to watch
BITCOIN 4H CHART | SOURCE: COINBASE, TRADINGVIEW.COM
A Fibonacci retracement chart drawn from the highest rotation of $ 4,235 to a low value of $ 3,340 provides us with levels where bitcoin could attempt a downturn. For the moment, the next resistance target is $ 3,682. If it's broken, then the price would cost $ 3,788 for a potential move. Etc. We also intend to treat these levels as our intraday goals.
Therefore, a break above $ 3,682 would put us in a long position around $ 3,788. In the meantime, we will minimize our losses by maintaining a stop loss order of less than 1 pip below the highest local swing. Similarly, a break below $ 3,552 would cause us to open a short position towards $ 3,340 with a stop-loss placed at 1 pip above the lowest local swing.
Trade safely!
Featured image of Shutterstock. TradingView Charts.
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