XBT/USD Analysis: Bitcoin Long Traders Take A Step Back – BitMEX Margin Trading

John Isige Bitcoin News PublishedSeptember 13, 2019 | ModifiedSeptember 13, 2019


XBT/USD Analysis: Bitcoin Long Traders Take A Step Back – BitMEX Margin Trading

  • Bitcoin falling wedge pattern breakout steps above $10,400 before retracement set in.
  • A cluster of supporting indicators at $10,200 suggests a continues uptrend in the short-term.

Bitcoin was gracious enough to react in tandem with our discussion in yesterday’s analysis. The formation of a falling wedge pattern was the key driver for the brief rally that topped levels beyond the 100 Moving Average on the four-hour chart. XBT/USD climbed above the resistance at $10,400 in the late Thursday session before slowing down the momentum on hitting highs of $10,474.

XBT/USD 4-hour chart

XBT/USD price chart
XBT/USD price chart by Tradingview

An ongoing retracement seems to be a reaction to BitMEX traders who are liquidating their longs after waiting for a correction from the recent dip to $9,800. However, as long as we stay above the accelerated trendline, Bitcoin will have the potential to test the next resistance at $10,600.

For now, long position traders need to take a step back and wait for the correction to find balance. Besides, the incoming Bollinger Band squeeze suggests that ahead lies good trading opportunities. If the price drops below the Bollinger Band 4-hour middle curve, the reversal is likely to test the 100 MA support (slightly above $10,200 which is marginally below the Bollinger Band 4-hour lower curve).

Further down, $10,000 is still Bitcoin’s historical vital support area. Although, I expect the main trendline to stop if not reduce the momentum of a potential drop that could refresh $9,800 (recent support) level.

The stochastic RSI sharp dive into the oversold following a retreat from the overbought suggests that short-term oversold conditions are approaching. Therefore, a reversal is likely in the near-term.

Bitcoin Key Technical Levels

Spot rate: $10,327

Volatility: High but decreasing (watch the Bollinger Bands for signals).

Trend: Bearish

Support Areas: $10,200, $10,000 and $9,800.

Resistance: $10,400 and $10,600.

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