In this article, we want to help you to determine the possible trading strategy for the Bitcoin. We will use our top-down trading analysis to find the suitable entry point and the target.
You can see on a weekly chart that the Bitcoin broke below the strong downside resistance 6430 level and also the triangle formation. This downside break which is happening as a narrow downside channel price action is important and could lead to greater losses. The first target is indicated by the 38.2% Fibonacci retracement level of the huge swing up Dec-14 to Jan-18.
The daily chart is revealing the key downside support zone now. It is 6500-7000 zone. As long as this downside support zone holds you should look to sell Bitcoin and to target 5525 level followed by the 4445 level, 61.8% of the Fibonacci extension and 38.2% of the Fibonacci retracement respectively.
For a trade entry, we will use the H4 chart. You can see that a pullback retest level is 6500 and you can sell the Bitcoin thereby placing the stop loss just above the 7000 targeting 5525 level first followed by the 4500 level if the first level gives up.
Happy trading! (click on the chart to enlarge it)
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