Bitcoin continues to struggle with testing the 5600 support level as downside continues to test recent lows. On the mid-scale (4-hour chart) as shown gives light to this level holding – however, there are some concerns before the long play of BTC can be considered.
As BTC broke multiple supports over the last two days, it should be noted that support should be confirmed. At this time, there is a small pennant/flag that has formed mid-scale with a flat bottom.
Additionally, there is the MA (moving average) line that puts downside pressure on price action as it attempts to retrace. Considering there has been very little upside along with low volatility, a breakout buildup has begun to form.
Hourly signals have produced a soft higher low*, however, this should be carefully watched before any re-entry attempts. At the moment, 5600 support must be confirmed by looking at BTC and whether it will hold 5600 support.
A break lower looks to seek out 5200 support next. The next major resistance level up still stands at 5600 – also 1/2 retracement of the previous leg down.
Stochastic levels mid-scale now exit the oversold (<20) levels to seek the upper region.
MACD readings now tick positively, however, keep in mind that this should not be used as an entry tool at this time.
BTC is currently a No Play. Risk: High.
If looking for a short-term buy/hold strategy, one option (Risk: High) is to place entry near support with a stop at 5500; as a break below to this level will likely seek new short-term lows.
Futures Traders – trade the trend. The short-term trend is currently sideways – no trade scenario.
Capital Conservation is the best option at this time until trend/pattern is confirmed.