On Sunday, the bulls were able to push bitcoin to $60,000, and then helped it overcome the $62,000 mark. Against this background, it is quite reasonable to expect an increase in the number of long positions. Many investors are already assessing the growth prospects of the leading cryptocurrency to the coveted $ 100,000.
Last week, two exchange-traded bitcoin futures funds were launched with great fanfare: ProShares Bitcoin Strategy Fund (NYSE:BITO) and Valkyrie Bitcoin Strategy ETF (NASDAQ:BTF). This stimulated demand for both the currency itself and open interest in CME bitcoin futures. Charles Edwards, CEO of the investment company Capriole, extrapolated the situation, stating that there was “huge interest from institutional players.”
Nevertheless, the technical picture hints that BTC intends to take a breath after the rapid growth.
BTC/USD –daily timeframe BTC/USD –daily timeframe
The digital token has dropped below its ascending channel and forms a potential H&S model.
The short moving average of the MACD indicator crossed the long MA, indicating a slowdown in growth. The RSI and ROC momentum indicators also show a “bearish” picture.
The ROC has already completed the formation of a small H&S figure and has since declined within the descending channel. At the same time, the RSI has recently strayed from its local maximum.
To clarify: the official signal for a reversal will only be a drop in the price below the “neck” line. If the H&S model turns out to be false, the breakdown of its top will open the way for the currency to new highs.
Trading Strategies
Conservative traders should wait for a drop below $55,000 and a subsequent pullback, which will encounter resistance; this will be a signal to open a short position.
Moderate traders will be happy with a close below $58,000 and a reverse movement that will minimize the stop loss.
Aggressive traders can sell now by taking on the risk associated with trading without confirmation. The more aggressive the trading strategy, the more critical the money management becomes.
Example of an aggressive short position
Admission: $63,000;
Stop Loss: $64,000;
Risk: $1000;
Target: $60,000;
Profit: $3000;
Risk-to-profit ratio: 1:3.
