Bitcoin gave the social media crowd plenty to cheer with a spike above 12,000, but before many could hit the tweet button, price action collapsed below it again. A Bitcoin whale who accumulated 9,000 BTC in 2018 sold them near the 12,000 top, after hodling through the January 2019 and March 2020 capitulation events. High liquidity due to retail demand created the conditions to realize profits. It also suggests that more downside is likely to follow in the short-term, wiping out many retail positions, drying up liquidity, before whales re-enter trades in a depressed environment. The area between 12,000 and 14,000 is thought of as ideal for profit-taking by significant Bitcoin players.
Our Analysis:
Should price action for the BTC/USD remain inside the or breakdown below the 11,520 to 11,765 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 11,680
- Take Profit Zone: 9,835 – 10,000
- Stop Loss Level: 11,900
Alternative scenario:
Should price action for the BTC/USD breakout above 11,765 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 11,900
- Take Profit Zone: 12,385 – 12,455
- Stop Loss Level: 11,765
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