Here we have BTC/USD on the 8H chart.
BTC/USD has been trading down since a higher low failed to hold up since the 7th January. Price has recently been trading within a structure, between the horizontal at 12600, and at a side-wards resistance line. Both have been keeping price down.
Price is currently breaking down. Each time price tests the side-wards resistance, it is making a new lower low within structure and getting weaker. But on the retest that is about to occur, it will find support at the 200 moving average, and a horizontal simultaneously at 12310. This could be a strong enough support to keep price from falling further.
I am expecting Bitcoin to eventually pick up momentum. I believe due to the continuous pressure, waiting for a hint of price action will not enough to risk a trade. We want a compelling set up, and there is 2 scenarios which could give us the compelling set up that we badly need to see Bitcoin go to higher prices.
This trade could play out in 2 days, I have outlined these below:
-Price successfully retests the first at 12460 and simultaneously hitting the 200 major moving average before a move up. This is the preferred scenario because if price action is hitting a strong support and major moving average and using as support, it implies the long term trend is favorably up. If this scenario occurs, it will bounce off the and have a strong up move to the target zone at 19640.
-Price breaks the first (The scenario mentioned above) at 12460 and breaks down further and finds support at 8500. If price makes it this far, it will create a compelling buy up to the target zone at 19640. It is compelling because price will be extremely oversold if it can make it this low.
Bare in mind that we need a compelling set up for a buy. Recently there's been extensive activity, and it will be a beyond average trade set up to get in nicely.
If price retests the first or second , it makes little difference anymore. Either the horizontal support and major moving average support, and the second scenario with an oversold are both scenarios Bitcoin will favor from. So let's be patient, wait for the right level, and trade safely.
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Do you recommend to jump in now? any buy entry you currently recommend?
Let's see :)
Much more content to come :)