Bitcoin outlook: day-trading opportunities
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:
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:
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.
Technical Analyst & Trader
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