BTCUSD - Day Traders Setup
Looking at Bitcoin USD with a day traders setup as this has been the principle mover, as per usual. With the recent break above 8k, BTCUSD set an all time high the 8200s and this will be our first target for a breakout, or breakdown. Of course, we lean bullish as this unstoppable train continues the rollercoaster ride - until it doesn't. If you are a trader and you are not using stop losses you will eventually get 'wrekt'. If you are an investor, by all means HODL this speculative position.
Green = 50dma
Red = 200dma
Orange = 9ema
Black = 20ema
On the daily time frame, a steep overnight pullback saw the price drop rapidly nearly $400 in just a few hours before reversing sharply to the upside, bouncing off the 9ema. Crypto traders should be becoming more and more immune to such extreme price volatility.
The price briefly broke down below pivot R2 before quickly reclaiming it. $7985 is a key level for the bulls to hold. Now while the dollar difference seems huge compared to the current price, in percentage terms this is only 3%. So caution is still warranted as the price inst quite out of the woods yet.
Looking at the stochastic RSI we see it is only just reaching uptrend as the MACD has continued to power higher, now extending far above the zero line -- it can keep going as we look at the RSI which has not even entered overbought conditions from this rebound.
If the price fails to hold pivot r2 we look to the 9ema and then 20ema for support.
On the 4 hour time frame we see the stochastic SI has turned up sharply from the midground after descending with the steep pullback. There is lots of room for it to push higher and back into uptrend, which is what longer term traders are looking for - continued momentum.
During this pullback the price tested and bounced sharply off of the 20ema (black) approximately $7955 which aligns with pivot r2 on the daily time frame. We can see this is a significant level. The MACD has flattened its curve, and would need to see a continuation in volume to drive it into a decidedly bullish formation. The RSI as well is still yet to reach those overbought conditions during this rebound.
Bulls should be target pivot r1 on this time frame, $8787 as the next target to the upside. If the price fails to hold the 20ema, a test of the pivot is in the cards $7316. Again though these dollar amounts seem huge in difference when viewed in percentage terms they are relatively nominal and would be conducive to healthy price fluctuations.
On the 1 hour time frame we see that a double top was set. This is our breakout target, approximately $8268.
A V bottom formed from the steep pullback and subsequent reversal with the 9ema crossing back above the 20ema. On the 1 hour time frame these are out nearest supports we would like to see hold. Support of last resort would be the 50dma green $8049. It is not unreasonable for the price to back test this range one more time. Bulls are simply looking to see the broader continuation of higher highs and higher lows, indicating the trend is still strong.
The stochastic RSI still has room to push into the uptrend range while the MACD produced a bullish cross. The RSI is in the midground and obviously, if the price sets a higher high above $8268 we would look for it to continue into the overbought range for our next run.
The price could consolidate here for a bit, producing a bull flag which would be a perfect formation to drive higher. The upside target is pivot r1 on this time frame $8787.
Bullish Above: $8275
Bearish Below: $8000
RISK TRADE: Scale a long position up to the 50dma on the 1 hour time frame, if the price fails to hold your stop loss should close you out and mitigate risk. Alternatively, enter heavy for a day trade on a print above the previous high.
Don't forget to use stop losses!!!
Follow at your own risk, Not a financial adviser, understand the risks associated with trading and investing. Manage your own Risk - in other words you could lose it all and it's your own fault.