Bitcoin kicked off the week by erasing gains made during the weekend, falling 1 percent against the US Dollar.
Bitcoin Relinquishes Hard-Fought Gains
The BTC/USD pair stayed depressed despite an upside attempt, printing intraday lows near 6319-fiat against the high at 6384-fiat. The breakdown action in the European forex market helped the dollar establish its 16-month high. Due to the US bank holiday today, Wall Steet is bound to post lower volume, but its relevance to the overall intraday health of the greenback could surface tomorrow when the market opens.
Meanwhile, bitcoin remains dead-locked under the giant bearish trendline discussed on plenty of occasions on CCN. Bulls’ inability to establish a concrete breakout action could lead BTC/USD to resume its downward movement. The extended declines nevertheless wake bulls around crucial support zones, the primary being around 6000-fiat. As a result, the market since September 7 is consolidating sideways within a strict trading range — defined by 100-period SMA as resistance and 6067-fiat as support.
As of now, the RSI and Stochastic on daily charts are looking to post more losses. There is a bullish trendline forming in near-term as depicted in orange in the chart above. Bears could look to attempt a small breakdown action after breaking it to the downside, only to retest 6204-fiat as support. At the said level, the market could see more long actions, pushing the BTC/USD pair back towards the 100-period SMA — which is coinciding with the giant descending trendline these days.
However, an intraday outlook is important for traders willing to open and close their positions on the same day of trading. Have a look.
BTC/USD Intraday Analysis
We are in the last leg of the Fibonacci retracement swing from 6540-high to 6271-low, and the BTC/USD pair is looking to extend its downside action towards 6271-fiat after rejecting bulls near 6374-fiat multiple times. That makes the latter our interim resistance and former our interim support for the rest of the US trading session.
That said, a pullback from 6374-fiat has enabled us to enter a short position towards 6271-fiat. Similarly, a bounce-back action from 6271-fiat will allow us to go long towards 6374-fiat. In both cases, maintaining a stop loss order just 3-4 pips against the direction of the price action would protect the trades from unexpected losses.
A breakout action, such that BTC/USD breaks above 6360-6384 resistance area, would have us open a long position 6437-fiat — also because we expect the market to complete the inverse H&S pattern. A stop-loss order just 3-pips below the entry point will define our risk management talent.
A breakdown action below 6271-fiat, in the meantime, would have us withdraw from the market for a while.
Featured Image from Shutterstock. Charts from TradingView.
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