Bitcoin price on Friday corrected 5% from its intraday high at $4,172, hinting that the ongoing uptrend is close to exhaustion.
The Bitcoin-to-Dollar pair found a compelling resistance area near $4,000 that reversed the breakout attempts on four separate occasions today. To the downside, the area near $3,880 provided similarly strong support to keep the upside bias alive. As a result, the Bitcoin market today was mostly choppier as it bounced between the two strong parameters at each of its sides.
BITCOIN/DOLLAR 1D CHART | SOURCE: TRADINGVIEW.COM, COINBASE
The trend is heading into a slowdown phase, where bulls are not entirely convinced for an extended upside momentum but are still adamant about keeping the supports alive. At most, the Bitcoin market could attempt to establish higher highs towards $4,423-4,500 area but the fears of potential downside corrections linger near such levels. Small traders would find it difficult to play higher highs when the market remains inside a giant bearish pattern.
The Relative Strength Indicator (RSI) tells a lot about the buying sentiment near peaks. Since September 17, the momentum line has found it difficult to set ambitious upside targets above 55-57 area. Now is the fifth time when Bitcoin is setting itself to break above 60 to maintain its buying sentiment. If it does then achieving 4,500 could be a lot easier than it is now. If not, then forming a double bottom towards $3,127-3,130 area could be a scenario to watch out for.
Bitcoin/Dollar Intraday Targets
BITCOIN/DOLLAR 1H CHART | SOURCE: TRADINGVIEW.COM, COINBASE
The Bitcoin/Dollar price action has found itself inside a range that is defined by $3,883 as interim support and $4,172 as interim resistance. These are not strong levels but give day traders a psychological parameter to plan their breakout or intrarange positions in advance.
That said, any sign of reversal from $3,883 would have us open a long position towards $4,172 and a reversal from $4,172 would have us open a short position towards #3,883. It would be our safest intrarange strategy in case the pair plans to overextend its stay inside the said area. A stop-loss order maintained 1-pip from the entry level against the direction of the price action will define our risk management perspective.
In the case of a breakout action, such that the Bitcoin/dollar pair manages to break above $4,172, we will open one long order towards $4,270 while maintain a stop loss position just 1-pip below the entry level. To the downside, a break below $3,883 would have put a short towards $3,637. A stop just 1-pip above the entry level would minimize our losses should the bias reverse.
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