Bitcoin might be setting itself up for a major pullback
Updated
So far, the first week of 2024 carried in a rocky fashion for Bitcoin, with the price initially posting a new high and then dumping nearly 10%, only to rise again later. Currently, Bitcoin trades near $44,000, and we are starting to ponder about a shorting opportunity. With that said, we are paying close attention to the upward-sloping channel forming above another upward-sloping channel we had shown in the previous idea (also shown on the main chart). This strategy would involve entering a short position with the breakout below the channel's lower bound and placing a tight stop-loss above it while targeting $38,000 and potentially $36,000. To support a bearish thesis, we would like to see RSI, MACD, and Stochastic continue declining on the daily chart. Furthermore, we would like to see a drop in the number of Bitcoin addresses with balances exceeding 100 BTC, suggesting big players are unloading their holdings after buying a dip in the past two trading sessions. Another bolstering factor to watch out for would be the weakness in the stock market, considering the strong positive correlation between the two. We will update our thoughts on the asset with the emergence of new developments.
Illustration 1.01
Illustration 1.01 displays the daily chart of BTCUSD and short trade setup, with the entry getting triggered upon a breakout below the lower bound of the upward-sloping channel and tight stop-loss above it.
Technical analysis gauge
Daily time frame = Neutral (no trend/weak trend)
Weekly time frame = Bullish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.
Illustration 1.01
Illustration 1.01 displays the daily chart of BTCUSD and short trade setup, with the entry getting triggered upon a breakout below the lower bound of the upward-sloping channel and tight stop-loss above it.
Technical analysis gauge
Daily time frame = Neutral (no trend/weak trend)
Weekly time frame = Bullish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.
Note
Rumors about the cryptocurrency exchange MEXC scamming its customers are rising across multiple social media platforms.
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