Bitcoin on Friday suffered a circa 1 percent loss against the US Dollar owing to an extended bearish correction.
The BTC/USD pair is now trading at 6340-fiat, 2.70 percent down from the November’s top at 6516-fiat. The 100-period simple moving average resistance discussed in our previous analysis has fared strongly for the fourth time. The strong pullback action from that level could undoubtedly allow the price to form downside targets towards 6203-fiat, vital support in the medium-term.
A breakout action above 100-period SMA puts sights towards the 200-period SMA in red. If we are anywhere below the level, the possibilities of strong pullbacks will linger.
USD has posted gains as expected against the major currency counterparts, reaching its 16-month high on Friday. Its correlation to bitcoin is visible in today’s trading session, verifying that macroeconomic factors could play a significant role in deciding the next direction of the digital currency these days.
BTC/USD Intraday Analysis
We are forming a Head and Shoulder Pattern on the 4H charts, according to which we are already near the neckline of the formation. A breakdown action from here could have us put a short position towards 6293-fiat, our interim downside target. As we put our strategy into play, a stop loss order just 4-pips above the entry point will protect our position from bias reversal losses.
A bounce back from neckline 6336-fiat will have us switch to intrarange and enter a long position towards 6380-fiat. In case the price attempts a pullback from 6380-fiat, we will enter a short towards 6336-fiat. In both the positions, we’ll maintain a 2-pip stop loss order in the opposite direction of the price action.