Bitcoin Price Establishes New Weekly High But Slips into Bearish Correction
On Monday, bitcoin underwent a bearish correction after establishing a new weekly high at 6440-fiat, falling close to 0.8 percent.
Bitcoin Hits Weekly High
The BTC/USD pair is trading in a bull trend above the 200-period simple moving average on hourly charts. The big move yesterday seems to have appeared more because of Tether, whose USDT token lost its dollar-peg once again, and its holders started jumping towards other coins. Prior to that, the BTC/USD pair was already pursuing a stable uptrend on near-term charts, albeit with low volume.
The correction taking place at this moment also signifies the formation of yet another bull flag. In a traditional scenario, such a pattern could lead to a breakout action towards the north. That said, the current pullback action could put BTC/USD towards the lower trendline of the parallel channel formation, seeking a strong bounce back above the 50 percent Fibonacci retracement level at 6421-fiat.
The RSI momentum indicator, meanwhile, is also hinting a dip into the strong selling area, mirroring the extended bearish correction prediction towards the lower dotted trendline. The Stochastic Oscillator is already inside the bearish region and is hinting a bounce back anytime soon.
On a 4H timeframe, the uptrend is still capped by a blue descending trendline — adjusted according to recent higher highs. The BTC/USD pair is trading in a bear trend below the 200-period simple moving average. A break above the blue trendline coupled with an increasing volume index rate could form a medium-term bullish sentiment, but an actual long-term upside bias will have to wait until the BTC/USD pair reclaims 7000-fiat.
BTC/USD Intraday Analysis: Bull Flag Expected?
According to our intraday strategy, we are pretty much watching the same range we defined in our previous analysis. That said, 6421-fiat is still serving as our interim resistance while the interim support is at 6329-fiat. The range is pretty wide to apply our intrarange strategy, so we are first waiting for the price to break below the lower red dotted trendline, and clear our short position towards 6329-fiat. As we enter this position, a stop loss order just 4-pips above the entry point will define our risk management perspective.
If we are indeed watching a bull flag formation, then a bounce back from the lower red dotted trendline should have us put a long position towards 6421-fiat, while sighting 6500-fiat as our breakout position target. In both the positions, maintaining a stop loss order just 4-pips below the entry point will minimize our losses in case there comes a bias reversal scenario.
Featured Image from Shutterstock. Charts from TradingView.
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