Bitcoin's hesitation has ended, and the break of the descending trendline confirms the double bottom. Looking at the structure it is making, we see that this might be a new leg up towards the top of the channel or, at least, to a new test of the $10,000 level. On the 4H chart, we see that the price pierced through the 200-SMA line (pink) and went straight to the upper edge of the Bollinger bands, as the Stochastic RSI made an upward hook. We should also observe that the volume bar shows a strong increment in trading.
On the 60-min chart we can observe that the price action is short-term overbought, and it has bounced off its 200-hour SMA. Therefore, to optimize the risk we should wait for a consolidation before opening a position. Also, the breakout of the highs of the large bullish candle could signal the right time to pull the trigger.A buy order at $9,210, with a target at the $10,000 level and an invalidation level of $8810 would result in a reward/risk ratio of 1.98. We have to keep in mind that the risk here is $400 on each BTC coin purchased. Consequently, traders must apply proper position sizing, according to the size of their accounts.
Main levels
- Entry: $9210
- Profit target: $10,000
- Invalidation level: $8,810
- Reward/risk: 1.98
Risk: $400 per coin,
Reward: $792 per coin.