According to the ADX the price moves in a sideway range in the hourly chart. this means that a break of the 20 period Bollinger band to the upside would indicate a impulse that could lead to the upper resistance of the trend channel, giving us a acceptable risk reward ratio of 3:1.
The stop should be set below the long candle that produced the breakout of the short term Bollinger bands. This is not yet existing on the chart so watch out.
Since the price tends to break out of the upper channel resistance it might be wise to use a trailing stop and sell on overbought RSI. Overall the consolidation since the last retracement to 13k is still forming a flag or pennant that can break out to the upside. with a potential price target of 27k. So this opportunity can be seen as a low risk entry for a long term position. Don't risk more than 1% of your capital in case your SL gets hit and you should be fine.
An alternative breakout to the downside finds support at the 200 SMA and below that on the lower channel border. The bearish scenario should not be traded since buy pressure is quite high and looking back it barely ever happened.
The stop should be set below the long candle that produced the breakout of the short term Bollinger bands. This is not yet existing on the chart so watch out.
Since the price tends to break out of the upper channel resistance it might be wise to use a trailing stop and sell on overbought RSI. Overall the consolidation since the last retracement to 13k is still forming a flag or pennant that can break out to the upside. with a potential price target of 27k. So this opportunity can be seen as a low risk entry for a long term position. Don't risk more than 1% of your capital in case your SL gets hit and you should be fine.
An alternative breakout to the downside finds support at the 200 SMA and below that on the lower channel border. The bearish scenario should not be traded since buy pressure is quite high and looking back it barely ever happened.
Comment:
The longer this sideways consolidation takes, the higher are the costs of the leveraged positions on margin lending markets. Since lending rates are about 1% per day, the price has to stay afloat to support paying the interest or traders will close their positions. The level of advancement right now is already forcing liquidation or the addition of margin, so this can lead to a sell off at any time after a bearish signal like a dropping price below the 200 SMA or a bearish cross of SMA 20/50. The momentum indicators still show divergences on the daily chart that would favor a further retracement. But technical analysis is to be taken with a grain of salt at all time highs.
Comment:
Just check the funding rates on bitmex to see when the margin long trades were closed.
www.bitmex.com/app/fundingHistory
I just looked it up and they are coming down already. This indicates less demand for loans to buy bitcoin or people went on to short Bitcoin. This is very healthy for a consolidation. As soon as shorts start to pay longs (negative interest shown in the funding page) is usually a good buying opportunity.
www.bitmex.com/app/fundingHistory
I just looked it up and they are coming down already. This indicates less demand for loans to buy bitcoin or people went on to short Bitcoin. This is very healthy for a consolidation. As soon as shorts start to pay longs (negative interest shown in the funding page) is usually a good buying opportunity.