Is bitcoin preparing for a breakout?
Bitcoin had a very good rally in 2017. Mid december 2017, it started correcting. This correction was very healthy for the stock. On 6 february 2018 , bitcoin has dropped 70% from the all time high around $ 20k. During the duration that bitcoin was trading between $7k and $6k, a lot of volume came in. This could potentially be the bottom. But to confirm that we are back in a bull market, many resistances have to be breached.
In the short term, it looks like BTC/USD is forming a pennant which, if broken to the upside, is a bullish pattern. The hourly RSI (53.2) has some room to fluctuate before it gets into an oversold or overbought area. The MACD just crossed over to the positive side which is bullish. If BTC/USD fails to break through the blue resistance, we could see some more down side. The next buying area would be around $ 7k.
A stop loss is placed right under the previous bottom. Each time a support has been broken, a certain part of the security is sold. When BTC/USD nears a resistance, a certain part of the security can be sold as profit taking. The red rectangles are selling areas and the green rectangles are buying areas. The bigger the rectangle, the bigger the trade.
Disclaimer: This is not financial advise.
I just want to give my humble opinion on some products by doing technical analysis. There may be some minor and/or major flaws. Nobody is perfect and I'm willing to learn from my mistakes through your opinions. Thank you.
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