Breaking News
0

Chart Of The Day: Which Way Is Bitcoin Headed Next?

By Investing.com (Pinchas Cohen/Investing.com)CryptocurrencyJul 12, 2018 10:01AM ET
www.investing.com/analysis/chart-of-the-day-200330541
Chart Of The Day: Which Way Is Bitcoin Headed Next?
By Investing.com (Pinchas Cohen/Investing.com)   |  Jul 12, 2018 10:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Bitcoin soared above $9000 on one small Singapore-based exchange on Wednesday, while its global average price hovered around $6,402.8. It isn't clear why the digital token was trading 50 percent higher on the World Exchange Services, or WEX exchange, versus other global platforms.

However, the trading anomaly re-ignited credibility issues around the cryptocurrency, which has recently been plagued by suspicions of trade fixing. The price of Bitcoin slipped 3.8 percent lower by the mid-European session on Thursday, at time of writing, to around $6,159.

Crypto experts are disagreeing over where Bitcoin will move next. One anonymous Austrian bull bet $8.5 million prices will reach $280,000 in five years. Representing the opposite camp, cyber security expert Joseph Carson at Tychotic, an enterprise protection agency, believes BTC could fall as low as $43, as mining costs increase.

Who’s right?

BTC Chart
BTC Chart

Both views are finding some confirmation in the symmetrical triangle-shaped consolidation between February and June. Bears are pressuring prices lower, toward the pattern's bottom, while bulls are picking up the supply, pushing prices back toward the range's top. Both sides are confident they are going to make money.

However, the June 12 downside breakout demonstrates that sellers have been outpacing buyers, which can also be seen in the triangle’s steeper top. Supply has engulfed demand within the pattern, forcing sellers to agree to sell at prices lower than the range in order to find willing buyers. Since then, there have been two return moves—in late June and early July—as prices retested the pattern’s resistance.

Still, should the current decline fail to register a lower trough and break above the dual return-move highs, it would complete a small H&S bottom, which could propel prices at least to the triangle top, currently at about $8,000.

Meanwhile, the downside breakout not only demonstrates that momentum is on the side of supply but also triggers stop-losses from technically oriented buyers, removing their demand from the equation, while prompting sell-orders. Presumably, this dynamic will intensify, as buying dwindles and selling increases.

Trading Strategies – Short Position Setup

Conservative traders would wait for confirmation of the downtrend, when the price posts a new low, below $5,762.0 registered on June 24.

Moderate traders may wait for a pullback, in order to enter close to the $6,800 return-moves' highs, to avoid a whipsaw.

Aggressive traders might short now.

Equity Management

Trading without a plan is gambling. Don't enter a trade before understanding potential risk and reward. As well, ensure that your plan fits your overall equity management. The minimum risk-reward ratio should be of 1:3, to get on the right side of statistics.

Trade Examples:

Conservative

  • Entry: $5,759, upon a close below the June low and below the psychological round number
  • Stop-loss: $5,763, above the June low, now a presumed resistance
  • Risk: $4
  • Target: $5,501, above the psychological round number, a presumed support
  • Reward: $258
  • Risk-Reward Ratio: 1:64

Moderate

  • Entry: $6,799, below return-move highs
  • Stop-loss: $6,999, below the psychological round number and triangle bottom
  • Risk: $200
  • Target: $6,001, Above psychological round number support
  • Reward: $798
  • Risk-Reward Ratio: 1:4

Aggressive

  • Entry: $6,182
  • Stop-loss: $6,403, above yesterday’s high
  • Risk: $221
  • Target: $5,519
  • Reward: $663
  • Risk-Reward Ratio: 1:3
Chart Of The Day: Which Way Is Bitcoin Headed Next?
 

Related Articles

Chart Of The Day: Which Way Is Bitcoin Headed Next?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Mark Sass
Mark Sass Jul 15, 2018 7:20AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I don't understand the "Conservative Trade". Why would you choose to set your Stop-Loss just 4 dollars away from the entry, when the spread regularly jumps to over 5 dollars?
Reply
0 0
PRIJESH Patel
PRIJESH Patel Jul 13, 2018 3:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nice one..
Reply
0 0
Arlan Yudhawantho
Arlan Yudhawantho Jul 13, 2018 2:14AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
GREAT job
Reply
0 0
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email