BTCUSD
Bitcoin's price has finally broke through the 7.5k mark after consolidating around the 7.2-7.4 levels, after the initial $600 jump a week ago.
We now take a look at the daily timeframe of the chart to try to predict where BTC will go next.
As you can see from the chart, the bulls have taken back control after the week of consolidation and the price is now moving towards the 200EMA which sits at around 7.8-7.9k mark. The 200EMA has proven to be quite a strong resistance and therefore it is likely to see the price rejected at that level.
ACTION: Look to short at the resistance (200EMA to capture the swing back down)
As RSI creeps into the overbought region at the current price level, taking a long position now will be unwise even though there is quite a good buy volume coming in from the bulls. I for one, will sit this one out and look to short only when price touches the 200EMA to capture the correction swing back down.
Where to take profit? and where will be the stop loss?
We can aim to take profit at TP1: 7.3k and TP2: 7k (marked by the yellow horizontal lines) after entering the short trade at 7.8 or 7.9k. The 7k mark is where the 50EMA sits at, and thus it is likely to serve as quite a strong support for BTC price.
ATR current value sits at 297. Which means we can put our stoploss at 8.1-8.2k mark.
This gives us a Risk-reward ratio of roughly 2.5 is to 1, making this short a highly probable and profitable trade.
Let me know what you think:)