Any bitcoin drops under $10,000 are being bought up quickly leading to long bottom wicks. This shows that there are a lot of bidders under $10,000 waiting eagerly to buy bitcoin.
At press time, however, on a lower time frame, Bitcoin formed a bullish pattern; hence, in the short term, we can expect bitcoin to go higher.
Bitcoin 1-hour chart
The one-hour chart showed formation of a falling wedge, which has a bullish bias as the price breaks out of it. Although the price has broken out of the falling wedge and slid lower, this could be a fakeout. Most patterns, especially, in crypto have a fakeout before proceeding to breakout in the right direction. This hurts the performance of the pattern.
The above chart showed two indicators: OBV, which indicates the volume for the asset, and RSI, a momentum indicator. Both are lagging indicators, regardless they provide a good insight when combined with the price and other indicators.
There is a bearish indicator between OBV indicator and the price. Hence, going forward, we can expect the price of bitcoin to pump. Additionally, RSI indicator is now at a 50 level – which is a neutral level.
Although things seem very volatile right now, it is better to have a tight stop-loss to avoid any wicks as seen before.
Entering a long trade at $10,178 with a stop-loss at $10,082 would mean a loss of 0.94%. Considering the target aka take-profit at $10561 or 3.72% surge, this has a good risk-to-reward ratio of 3.95.
An additional reason for this tight stop-loss is because of the recent crash of bitcoin. CME gap ranging from $9,645 to $9,995 will be filled soon and bitcoin might even head lower. Considering this scenario it is better to just short bitcoin on a larger time frame.
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