Bitcoin - Trade Setup

Playing The Bounce

We are trying this new article setup called “Trade Setup” where we’ll present any time sensitive trade idea to you in a concise manner. If you would prefer a different medium of communication for these setups, let us know! However, the lesser time sensitive setups will still be provided through our regular articles. Feedback on this idea in the comments below is very much appreciated!

Bitcoin has just setup a bullish RSI divergence on the 4-hour time frame i.e., lower low on price but higher low on RSI. Entry around the $41k to $41.5k region would be ideal. Target 1 is the 200-period MA (in orange) at $43.4k, target 2 is the 0.5 retracement level at $44.8k and target 3 is the 0.618 retracement level at $45.8k. Stoploss should be kept at $40.2k level or lower on a 4-hour closing basis.

Remember, this is a high-risk trade since it’s against the short-term trend. Of particular importance is the US Dollar ($DXY), which is attempting to reclaim its mid-range level at 103.318.

However, on the 4-hour time frame, $DXY looks overextended. It’s in the process of printing a bearish RSI divergence i.e., higher high on price but lower high on RSI. In general, $DXY correcting down would see Bitcoin bouncing.

Once again, feedback for such time sensitive trade setups through this format is looked forward to in the comments below. Until next time!

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