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Bitcoin outlook: day-trading opportunities

Jason Sen

Bitcoin volatility has decreased significantly in recent weeks, as the public loses interest after the wild speculative days of 2017 and the $16,000 crash of 2018.

However there are still trading opportunities for day traders. The cryptocurrency is holding the 200-week moving average at $3333, which is rising very slowly each week. It has climbed from $2990 over the past month, although this slow rate of ascent is likely to slow further after the last three weeks of sideways action.

Bitcoin weekly chart:

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I have a crash low of $3181 so I think it is safe to assume that a break below $3000 starts the next leg lower in the crash. Going back to the price action in late-2017, we spiked down in September to $2972, just before the cryptocurrency rose in an almost straight line to $19,666. Interestingly we have a previous 2017 peak at $2967 in June so the line in the sand is $2972/67.

It is reasonable to expect a lot of stop-loss orders to have been set just below the big $3000 round number. So a break below $2950 could see the price vacuum quickly to $2800/2790 and $2650/2600. Further losses could see $2450/2400.

Bitcoin daily chart:

Click to expand image

As long as we hold above $3000 it is probably worth holding a long position. You never know when the price will start to climb from the 200-week moving average. Last week we shot higher from $3328 (exactly at the 200-week moving average in fact!) to $3711 and traded sideways (as is characteristic these days after a spike).

A break above $3380 targets the three-month trendline resistance at 3870/80. A break higher again tests the 100-day moving average and recent peaks in the $4000/4100 area. It is only above $4100 that we can start to talk about a more sustained bull run targeting $4235, $4400 and perhaps as far as very strong resistance at $4700/4750.

Jason Sen

Technical Analyst & Trader

For more information and trading education visit InterTrader

The content of this article is the personal opinion of the author and not InterTrader. You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.

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