A sharp drop in BTC/USD pair, strong support ahead
May 24, 2018 (Investorideas.com Newswire) The medium-term bullish rally in the BTC/USD pair has come to an end after it hit the major resistance level at 11625.3. Majority of the long-term price action trader managed to short this pair with the bearish price action confirmation signal in the daily chart. From that level, the pair dropped towards the major support level at 6490.5 and again started its bearish rally. But unfortunately, the buyers failed to establish a new high and found extreme selling pressure near the critical resistance level at 9830.2. The bulls failed to retain their bullish momentum and currently the pair heading towards the major support level at 6490.5. Below this level, we have plenty of support levels and the bears will have a tough time in clearing out this supportive zone. So we might see some ranging market as soon as the price bumps into the support zone.
BTC/USD daily chart analysis
Figure: BTC/USD heading towards major support zone
From the above figure, you can clearly see we have plenty of supportive candles just below the current price level. The first initial bearish target for this pair is at 6490.5. From that level, we might see some false spike down towards the next support level at 6156.5. The experienced traders of the reputed Forex broker will be waiting in the sideline for a bullish price action confirmation signal. Any bullish price action confirmation signal near the critical support level will be an excellent opportunity to execute long orders. However, the currency bearish movement of the BTC/USD pair is extremely strong which suggest we might see a test of the major support level at 5488.6. This level is going to be extremely important for the BTC/USD bulls since a daily closing of the price below that level will confirm the establishment of a long-term bearish trend in the BTC/USD pair.
If the bulls get fired up near the critical support level, the first initial bullish target for the pair lies at 9830.2. This level might provide temporary bearish momentum but a clear break of this level will ultimately lead this pair towards the next resistance level at 11625.3. The bulls need to take out this level to confirm the end of the medium-term bearish rally. However, the BTC/USD bulls will have a tough time to clear out that resistance level since FED officials is most likely to hike their interest rate (90% chance) on the month of June. But the optimistic bitcoin bulls will be cautiously waiting for a dovish rate hike from the U.S which will ease most of it the bearish threat to this pair. A clear break of the price above the critical resistance level 11625.3 will eventually lead this pair towards the next major resistance level at 17344.5. From this level, we might see some selling activity due to profit taking action from the retail traders. However, a strong surge in the price to such an extent is most likely to challenge the record high price of BTC/USD at 19891.0. If we see such a strong surge, the cryptocurrency traders are advised to stay extremely cautious since the market might exhibit extended bullish run. However, we might see another significant drop in the BTC/USD price from the major resistance level at 19891.0. So traders are advised to stay cautious when the price of BTC/USD rally towards the record high.
Considering all the technical factors, it's better to wait in the sideline and wait for the bulls to establish solid ground. The aggressive traders might set pending orders at the key support level but in the absence of definite bullish reversal signal buying the pair with limit orders will be an immature act.
An economist, Forex trader and Forex writer, I have a keen eye for spotting international trading trends, particularly since shadowing my mother’s work over the past 20 years with one of the largest fashion groups.
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