Bitcoin has reached our profit target before bouncing nicely. Prepare for a drop.
Sell below 8590. Stop loss at 8893. Take profit at 7837.
Reason for the trading strategy (fundamentally):
The major news events surrounding cryptocurrency would be Israel’s securities regulator has said that cryptocurrency-related firms may not be listed on the Tel Aviv Stock Exchange (TASE) index because of the high volatility which would be a risk for passive investors whose portfolios track the indices. However, crypto-asset firms can still be traded on the exchange itself. There is some good news though, with Peter Thiel, billionaire co-founder of PayPal, has once again endorsed bitcoin which he recently argued is tantamount to digital gold. This has caused the recent spike in Bitcoin’s prices but there remains a bigger picture of uncertainty surrounding it with Peter Thiel admitting that there is a 50-80% change in will have no value in the future.
Reason for the trading strategy (technically):
Price has dropped perfectly to our profit target before bouncing up nicely. We look to sell below major resistance at 8590 (Fibonacci retracement, horizontal overlap resistance, Elliott wave structure) for a drop once again to support at 7837 (Fibonacci retracement, horizontal pullback support).
Stochastic (34,5,3) is seeing major resistance at 92% where a corresponding reaction could occur.