Daily Report – Bitcoin and Market Update (May 23 2020)
HTF 12H:
Middaily closed two dojis in a row, which after solid selloff 9.8-8.8k and tiny hammer candle is technically not the strongest response from bulls.
Currently hence MA50 (12H) is working clearly as a resistance with intraday supply 9170-9303.
Price Action currently consolidating in a form of a potential symmetrical triangle. If the triangle is set to break out to the upside, the bulls will need to push asap to trade back above MA50 at 9220. High chances we still may visit 8.9k before the pattern unfolds. Breakout to the upside comes with a target at 11.8k (closing long-term breakaway CME gap up there). Breakout to the downside comes with theoretical target of 6700s.
Not to fall in bear trap, any shorts I would take here should be on the breakdown retest. Weekly trend is still strong and bullish, which overall makes the MTF support stronger than weaker. There is also hidden bullish divergence on momentum (Higher Lows Price Action vs Lower Lows Oscillator), which technically is trend continuation signal, and the trend is up.
If MA50 9220 is reclaimed as support (break above and retest) the local target is diagonal resistance at 9800s. Short-term triangle breakdown target is 8000 (Range Lows + MA100 + MA200).
For the triangle is bound to unfold within next few days with intense volatility, it is highly suggested to Take Profits on profitable positions, trail up stops to secure your capital. Local stop loss is 8787. Truly bullish trend continuation comes after breakout retest above the triangle resistance. New highs would come up there.
LTF 1H:
Hourly Price Action in the pickle right now. Struggling to reclaim the breakout and retest is at risk of failure. Holding MA50 (1h) is bullish and set more towards 9500 retest of MA200.
By Fibonacci retracement, we are trading EXACTLY at 50% of correction from the range highs. It’s clear mid-range level for this ongoing consolidation. Technically hence, no trade should be taken here until situation clarifies.
Bullish scenario assumes break above local resistance of 9313. Then if resistance is reclaimed as support and we hold 9320, the next resistance is triangle diagonal downtrendline 9800s, which brings super high chances of upside breakout and way to 11000s. Unless that happens, bearish scenario may also be in play.
Bearish scenario would come with breakdown of MA50 (1h) and rejection of the breakdown retest. This way bitcoin would most likely land with lower low around 8600s for temporary support and 78.6% of Fibonacci level for the ongoing correction.
One is suggested to trade the scenario accordingly, while obviously if not a short-term trader, then wait and long breakout retest or short breakdown retest of the whole triangle.
No over-leveraged position is safe here and any more violent move would probably bring lots of liquidations. Expecting violent Price Action around the daily close today or weekly close tomorrow.
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