During the late trading session on the Sunday 16th of July, the BTCUSD pair bottomed around $1820 on average in major USD markets and 13,000 in leading CNY exchanges. Since then, it has retraced the entire fifth wave of the down leg and moved 30% upwards towards its resistance around $2400.
What we’re looking at above is an impulse move towards the up side. This could be the continuation of the general up trend in the longer run. Our recommendation would be to wait for the pull back before buying and entering the market with a long position. Instead, you can take advantage with a short position. Please note this is a short term movement, so a stop loss in this scenario is absolutely crucial to prevent any unexpected loss. With a risk/reward ratio of 2.11, keep a tight stop loss around 2450 and take profit at 2200.
The strong reversal zone was tested +6 times and is coupled with MA’s resistances. Stoch RSI has a bearish cross when we analyze the moving averages in the shorter time frames like 15 & 30 minutes. Since this is just the start, it can go further down.and hidden divergences are also present as shown above. Therefore, there’s a likely chance of a pullback in the short term future.
The sentiment around Bitcoin and crypto is once again turning to be positive with the chances of split and hard fork getting slim as we get closer towards 1st of August. Technicals might be agreeing with the fundamentals as the longer time frames are showing bullish signals, while this can be a small correction after a strong impulse movement.