Here on the BTCUSD chart the monthly chart does not give any info what so ever, so i decided to look at the weekly TF. The first thing i did was to plot all the concrete levels from the weekly TF (have a look at the main chart). At the moment of writing the price is in between the 10,000 support and 12,000 on weekly TF. Adding to this, the price seems to be capped by a descending which is preventing the bitcoin bulls from pushing higher. currently the market is giving me neutral bias as i feel the cryptos are mostly driven by technical trading rather than fundamental ones with exceptions of breaking news which affects cryptos immediately without any warning.
So below are the two possible scenarios which should potentially take place for the price to make its next move, be it UP/DOWN
1) FOR A SCENARIO
The price as explained is capped by a descending . So for the price to push higher not only must the (weekly candle closes outside the ) but also the 12,000 needs to be broken (weekly candle should close above 12,000 level). If this takes place we have confirmed the and resistance breakout. so finally for the trade entry, its advisable to await slight retracement before executing a LONG trade to target the next resistance that lies at 14,000 level
2) FOR A SCENARIO
Have a look at the image above. its a of BTCUSD which shows the price confined in a well held triangle supported by an ascending . For the scenario to take place, the price needs to breach the ascending (weekly candle must close outside the ). Once this has happened we can wait for the price to retrace and enter a SHORT trade to target the next support that lies at 8,000 level
IN ALL TWO POSSIBLE SCENARIO THE RISK TO REWARD RATIO IS SUGGESTED TO BE 1:1 WITH THE POTENTIAL STOP LOSS PLACED JUST ABOVE THE OR BELOW THE .
IN FX trading i do a combination of fundamental and which gives me an extra added confluence to validate my trade, however in this case, the pure technical price action picture is telling me the above two possible scenarios. if you notice, trading with risk management is about taking out the support or resistance levels one at a time rather than aiming for 20,000 or 40,000 impulsively! With Bitcoin or other crypto market being so volatile, in my view its best to take this approach so as to preserve your capitals.
Hope some of you will find my outlook helpful and i will certainly in the future think about adding cryptos to my trading portfolio. cheers and trade safe