Bitcoin $BTCUSD Short Setup
Fundamental Analysis :
The correlation between bitcoin and the stock market has been pretty direct ever since the market plunge in March and it doesn't seem to be decoupling so far. With chairman of the fed announcing this quarter to be the worst in a while we can expect the market to price that in sooner rather than later. It also seems that the number of corona cases is accelarating in many of the United States and fear of a second wave might have a heavy impact on the market.
Technical Analysis :
A last outside note from the stock market is that the S&P just recently broke a multi-month rising wedge that's been forming as shown below.
As we can see on the main chart Bitcoin is currently testing the support line or base of the descending triangle. We are getting pretty close to the breakout point which is why I am opening a short position. This formation has a bearish bias but we may get a retest the 20 MA so I would suggest leaving a comfortable stop loss above 9500 preferably, we can also notice a higher selling volume in the VPVR. I personally thing we might retest the 6800 region for a potential inverse head and shoulders formation as demonstrated below :
Since I'm leveraging my trade I will take profit in my first target of the strong support at approximately 8.5k but I think the market conditions are making it likely for us to hit the 6.5k target.
S/L: 9500$
T/P: 8650
Fell free to share your thoughts and good luck.
The correlation between bitcoin and the stock market has been pretty direct ever since the market plunge in March and it doesn't seem to be decoupling so far. With chairman of the fed announcing this quarter to be the worst in a while we can expect the market to price that in sooner rather than later. It also seems that the number of corona cases is accelarating in many of the United States and fear of a second wave might have a heavy impact on the market.
Technical Analysis :
A last outside note from the stock market is that the S&P just recently broke a multi-month rising wedge that's been forming as shown below.
As we can see on the main chart Bitcoin is currently testing the support line or base of the descending triangle. We are getting pretty close to the breakout point which is why I am opening a short position. This formation has a bearish bias but we may get a retest the 20 MA so I would suggest leaving a comfortable stop loss above 9500 preferably, we can also notice a higher selling volume in the VPVR. I personally thing we might retest the 6800 region for a potential inverse head and shoulders formation as demonstrated below :
Since I'm leveraging my trade I will take profit in my first target of the strong support at approximately 8.5k but I think the market conditions are making it likely for us to hit the 6.5k target.
S/L: 9500$
T/P: 8650
Fell free to share your thoughts and good luck.
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