ForexMinute.com — Last 24 hours in the cryptocurrency market saw Bitcoin recovering a little from the recent sharp decline. The upside movements, however, seemed more like a temporary slope — a bear flag — against the previous trend. It simply means that the market is still expecting a further downside pressure.
A part of this downside action could be blamed on the upcoming meeting of FOMC, where the organization might decided to raise the interest rates by 0.50 to 0.75 percent. This means that a stronger dollar would bring the speculative Bitcoin value down, a fear that is pushing more and more investors towards the US stocks investments.
In case the FOMC meet doesn’t fruit any new announcement, we might see a ripple effect on Bitcoin value. Of course, we would need to maintain our risk levels to stay alert on both sides. With that said, let’s check out the range we are watching for today’s intraday breakout strategy.
Bitcoin 4H Chart
Due to a relatively lower volatility, we have revised our range levels for the ongoing European session. For now, the range we are watching has 227.16 fiat serving as the in-term support, and 232.21 fiat serving as the in-term resistance level. These are going to be our parameters for today.
Meanwhile, we will also be considering the technical indicators before deciding on the direction of our positions. As you can see the 4H BitFinex chart above, Bitcoin has neatly fallen below its near and long term SMAs. The 4H RSI also has dipped below 40, indicating an absence of buying signals. The MACD indicator — likewise — is maintaining the negative bias. As also stated above, the formation of the bear flag has further confirmed the longevity of the downtrend.
We would, therefore, be naturally placing a short position towards the in-term support line. If the range support is broken, our short position will automatically shift towards the medium-term downside target near 226.00 fiat. On this trade, our stop loss will be maintained near 227.75 to get us out of the trade should a bounce back takes place.
Looking the other way, a pullback towards the intraday high near 230.70 fiat would have us hold our long position for a while. If the said intraday level is crossed, we would put a long position towards the in-term resistance level, while keeping our stop loss near 229.98 fiat. A further break and we will enter a similar long position towards the medium-term upside target near 232.86 fiat.