Trading plan for Bitcoin for February 05, 2021

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Technical outlook:

Bitcoin continues to consolidate within a potential triangle structure after having printed the $42,000 high last month. The crypto might have terminated its last leg within the consolidation around the $37,000 mark and might be ready to break lower from here. Bitcoin is seen to be trading around the $37,100 level at this point in writing and is expected to drop lower towards the $30,000 level from here. Immediate resistance is seen around the $42,000 mark, while support comes in around the $29,500-$30,000 levels respectively. A break below the $29,000 mark will confirm a meaningful top in place and further accelerate its drop towards the $18,000 level at least. Also note that $18,000 is Fibonacci 0.618 retracement of the entire rally between the $3,850 and $42,000 levels respectively. On the flip side, if Bitcoin finds support ahead of the $30,000 level, there remains a possibility of a push beyond the $42,000 highs one last time before turning lower again. In that case, it could be seen as a bullish triangle breakout before final push. Either way, upside remains limited from here and Bitcoin remains a good candidate to be sold on rallies.

Trading plan:

Remain short, add more @ $37000, stop @ $42000, target is @ $18000

Good luck!

The material has been provided by InstaForex Company - www.instaforex.com

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