After topping a near $42,000 US dollar trading value last Friday January 8, 2021, the Bitcoin has fallen into sell-off turmoil over the weekend. At the time of writing this analysis, the Bitcoin is exchanging hands at the $33-35K trading ranges where a lot of selling pressures can be found.

Still volatile and risky as ever though a possible mini pumps towards the $36,000 mark but I am not convinced just yet that Bitcoin will undergo a new bull run where headlines just hit the King coin hard. One of the news recently out was one of UK’s biggest bank, the HSBC barred Bitcoin traders or even miners to deposit profits. Definitely a huge blow!

Going to the technical analysis, both the longer time-frames found in the daily, weekly, and monthly charts suggested that Bitcoin is overbought and may pop a bubble sooner than expected and it did. All the long time-frames’ RSI indicator is oversold where a lot of trading analysts speculate a massive sell-off.

Before the BTCUSD fell, it managed to hit two new record highs just for January 8, 2021 alone  found on the 5-minute time-frame before it finally crashed as low as $30400+ levels where still many traders have bought this dip hoping for a rebound from the descending wedge pattern that the most dominant cryptocurrency has fallen into.

Any possible scenarios can still occur from here like the dip might be revisited or the Bitcoin will make new and slow recovery by taking near-term resistances one by one. As for me, I am short on the Bitcoin against the USD.

My trading plan will be waiting for the Bitcoin’s 200-hourly SMA (simple moving average) to be hit again. It was a crucial support that has turned into a resistance and just located a little above the hourly 0.50 Fibonacci retracement level. I am assuming it will be re-tested and once it does, that would be my entry for my short trade position at the $36,300 to be precise.

I will take profit at the recent dip located at $30,400 mark and set my stop loss in the $37,000 price level. This trading will give me a Risk:Reward Ratio of more than 8.

For now, we will keep a close eye on the news headlines across the cryptocurrency markets for the rest of the trading week ahead.

BTCUSD Short - The Bitcoin Sell-Off

Jan 12 2021

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