Chart Of The Day: Will Bitcoin's Wild Ride Take It To $6,500 Next
Investing.com | Mar 09, 2020 14:57
Bitcoin has been going wild. The cryptocurrency is currently down 1.7%, having trimmed an earlier 4% plunge.
Yesterday the digital currency lost 9.4% of its value. The largest crypto by market cap is down for a third day, showing a total loss of 13.5%, at the time of writing.
Rather than being treated by traders as an alternative safe haven, Bitcoin instead seems to suffering from the current market turmoil, as a second, stronger wave of coronavirus fallout takes hold of global financial markets— on top of a savage oil price war being waged by Saudi Arabia and Russia.
Since some have referred to Bitcoin as “digital gold,” we would have expected it to act similarly in this market environment. At this juncture, however, perhaps the common wisdom that cash is king may have pushed gold lower, after it penetrated the $1,700 level. Which could also explain why BTC/USD continues tumbling.
Bitcoin's rising flag, which we wrote about last week, has further developed its rising flag, completed it and achieved most of its target.
At the same time, it completed a H&S top, whose implied target is about $6,500. That's another example how the technical charting puzzle comes together, as that level happens to also be the December 2019 lows.
The same symmetry is visible with the pattern’s head realigning with the Oct. 26 high. As well, it's now clear that the H&S shoulders were flags: a falling, bullish one on the way up and a rising, bearish one, on the way down. Finally, the price found support by the November highs.
h2 Trading Strategies/h2Conservative traders would wait for a return move to the neckline at $8,500, which will prove a resistance.
Moderate traders are likely to wait for the same upward correction, but for a better entry rather than to verify the trend.
Aggressive traders may enter a contrarian long position, to ride the probable short-term rally.
Trade Sample – Aggressive Trade
- Entry: $7,800
- Stop-Loss: $7,700
- Risk: $100
- Target: $8,300
- Reward: $500
- Risk:Reward Ratio: 1:5
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.