Bitcoin has rebounded after taking support from the trendline discussed earlier. The price is now trading at $232.73, 1.79 percent higher than yesterday. The rebound of the past two sessions is erasing the losses for the week.
As the cryptocurrency heads into the weekend, things become even more interesting as a new range is expected to trap Bitcoin. I am expecting the level of $220 to continue playing as a support while the zone of $240-242 should act as an upside barrier to Bitcoin.
Technical analysis of the daily BTC-USD price chart has been presented below.
Bitcoin Chart Structure – Even as Bitcoin stages a short-covering-led bounce, there is a less probability of it immediately piercing the earlier consolidation zone of $240-242. The level of $220 has attracted buying interest repeatedly before, and until and unless that breaks decisively, market participants can safely go long on declines.
Fibonacci Retracements –The 76.4 percent Fibonacci retracement of $242.36 is expected to add additional pressure on the bulls.
Moving Average Convergence Divergence – The MACD and the Signal Line continue to crash unabated. The value of MACD has now hit -11.5507 while that of the Signal Line is -6.7442. The Histogram is now at -4.8066.
Momentum – After edging up before, the Momentum reading has taken a beating again. The value has dropped to -38.4200. This is despite the fact that the price has risen almost 2 percent.
Money Flow Index – The MFI is still indicating oversold levels with its reading of 16.3935.
Relative Strength Index – That the underlying strength is still feeble can be understood from the 14-day RSI value of 30.7455.
There is a simple strategy to be adopted in the present case. Buy low and sell high, but all by following stop-losses.
Market participants should create long positions when the price nears the support of $220-225 and create short positions when the price approaches the resistance of $240.
Maintain a risk-reward of 1:2.5 in trades.
As the cryptocurrency heads into the weekend, things become even more interesting as a new range is expected to trap Bitcoin. I am […]