Since months, BTC has been ranging within a region. There is no clear direction on it right now. Whenever the Bitcoin breaks on either of the side, then we will look for a position.

- Market structure: Although market is in a range, it has been creating LH’s and LL’s in the daily timeframe. It is inevitable to suggest otherwise than BTC being in a downtrend right now. Unless the range of $42,500 is breached to the upside, the trend remains bearish for now. The resistance we have within the range is at $35,000, where other factors confluence as well. If the resistance is broken, then the trend may shift towards bullish and continue to $50,000.

- Trendline: Earlier, the descending trendline, was broken with low force. The next candles kept hovering around the trendline. Later, the candles moved from the trendline validating the breakout buy. In order for full validation, the resistance needs to break for the confirmation of this breakout buy.

- Retracement: In a ranging market, we cannot ascertain a Fibonacci retracement levels. The both sided move unables us to correctly determine the retracement levels. In this case of Bitcoin, the retracement remains uncertain for now until we get a clear direction.

- EMA's: EMA 200 and EMA 50 were on a verge of a death cross only to miss it and continue the bullish direction. Since the death cross did not happen, both EMA’s happen to be below the current prices depicting and uptrend. This situation is forecasting a directional shift in BTC.

- RSI/CCI: It is to be noted that RSI has reversed from its 70 level where as CCI went over board its over bought region at 315, from which it took a bear effect and dropped back to the 92, not much aligned with the drop in the price. It is better to look out for the neutral levels on both the oscillators for better trade positioning. Since the range is still intact, the over bought situations will infuse selling pressure and over sold regions will enact buying pressure. It’s advisable to wait for the range break on either side before taking a trade.

Bitcoin needs a breakout

Jul 31 2021

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