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Bitcoin Price – Quick Take:
- The price of bitcoin fell more than 8% over a 24-hour period.
- The cryptocurrency is attempting a withdrawal from a historically strong support area above $ 3,550.
- A further breaking action could lead to a double bottom scenario.
Thursday's bitcoin price fell more than 8% in the Asian and European trading session, according to aggregate market data on CoinMarketCap.com.
The BTC / USD pair traded at $ 3,635 on Coinbase at the time of printing, up 2.7% from the session low to $ 3,556. It formed an inverse relationship with the US dollar, which appeared stronger due to favorable macroeconomic fundamentals. The US dollar index, which measures the US dollar with six major global legal currencies, rose 0.34% to 95.11 after falling to a three month minimum.
Technical indicators of the price of bitcoins
The price of bitcoin fell below its bearish pennant formation. The dotted blue trend line of the pennant represented by (B) indicates the failed support, while the upper trendline (A) is still strong as resistance to the session.
There are now two possible price actions for bitcoins from here: either he could try a pullback or he could further extend his downtrend. Let's talk before the first scenario.
Collection scenario
In our opinion, bitcoin is exchanged within a false breakout area. There are six separate cases in which this area has proved to be a decent support and resistance (depending on the direction of the trend). The small square boxes in blue indicate how the price of the bitcoin has tested the area between $ 3,556 and $ 3,652 before. During most sessions, traders considered the range as a signal to be purchased.
The most recent purchase action can be displayed in the boxes (5) and (6). The price action between December 24 and December 27 also reflects a similar commercial sentiment.
Therefore, just because the bitcoin has broken below (B) does not mean it will extend its downward momentum. The cryptocurrency could see a downtrend to push the price into a mid-term sideline consolidation area defined by $ 4,000 as resistance and $ 3,652 as support.
Breakdown Scenario
A prolonged break action could bring the bitcoin close to its temporary lower area above $ 3,110, forming a double bottom. Previously, analysts had predicted that the bitcoin would break under the bottom area to set new lows towards $ 2,500. From a technical point of view, a double bottom scenario is more likely to reverse a trend than to extend it. Generally, the longer duration between the two funds would guarantee greater probability of rebound.
Target Bitcoin Price Intraday
The sale action has modified our intraday targets for the new range, which is defined by $ 3,555 as temporary support and $ 3,686 as our temporary strength.
We will start the day by opening a short order to the support while maintaining a stop loss position 1 pip above the entry position. After a rebound from or before the support, we will open a long position towards $ 3,686 maintaining a stop of just 1 pip below the entry point.
In the event of a failure, so that bitcoin breaks below the temporary support level, we will open a short order to $ 3,369. A stop-loss of $ 3.565 would minimize our risks if the price action reverses. Likewise, a break above $ 3.86 would get us into a long position towards $ 3,817, our upside target. A stop-loss order at $ 3,676, meanwhile, will protect us from the potential change in interim bias.
Shutterstock foreground image. TradingView Charts.
