BTCUSD Capped by Strong Resistance

Bitcoin price today tumbled 2 percent against the dollar, confirming a weak push by bulls in the current bearish bias.

The BTC/USD continued to extend its prevailing upside momentum, breaking above 6500-fiat to establish 6620-fiat as its new intraday peak level. However, the absence of enough bullish sentiment around the peak area, also visible during the August 15th pullback action, reversed the upsides. The pair dropped as much 4.5 percent, as a result, and is now attempting what looks like a weak bounce back.

We also had to exit our long position on a small loss when BTC/USD just fell shy to test 6650 as our primary upside. Our stops below the entry position protected us from additional risks. In the process of the latest bearish correction, we also noticed price breaking below the ascending wedge. Let’s have a look at the hourly BitFinex chart below to further understand the market’s mood.

BTCUSD Technical Analysis

The BTC/USD has broken out of the rising wedge pattern, but its downside is capped by strong bull supports near 6348-fiat and 6255-fiat. As for now, we are close to forming a near-term Head and Shoulder pattern, with the head near 6620-fiat and shoulder near 6255-fiat. The left shoulder of current H&S is also the right shoulder of the inverse H&S, which makes it a crucial level to watch for as the price attempts another downside.

Technically, we are in a near-term bearish bias, for the BTC/USD has pair has now slipped under its 100H moving average and a further gravity could move the pair below 200H MA as well. The RSI and Stochastic are now oversold and should stay the same until BTC/USD attempts a decent bounce back from any of the above-mentioned support levels.

BTC/USD Intraday Analysis

As far as our intraday analysis is concerned, we are now considering it to stop putting our long position above 6600-fiat. Anything above 6500-fiat at this point of time looks uncertain due to weak bullish attempts. Moving on, the range we are watching for today is defined by 6348-fiat as interim support and 6500-fiat as interim resistance.

We are first waiting to establish a breakout towards the shoulder level at 6255-fiat, also our primary downside target. A short towards the said position looks achievable, but we’ll also put our stops two-pips above the entry position to exit the market on a trend reversal.

A bounce back from support, however, will allow us to put a comfortable long entry towards 6500-fiat. A further break, and we’ll test 660o-fiat as our primary upside target while keeping our stop loss 2-pips below the entry point.

Featured image from Shutterstock.

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