BTC/USDT Short Trade Setup - 4H Chart Analysis
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Bitcoin has been displaying strong volatility recently, and the current setup on the 4-hour chart suggests a potential short opportunity. Let’s break down the analysis:
Key Observations:
1. Rising Wedge Breakdown:
The price action was confined within a rising wedge pattern, which typically indicates a bearish reversal.
The breakdown has occurred as expected, with price closing below the lower trendline, confirming bearish sentiment.
2. Resistance Zones:
Primary Resistance: $96,497.58 – This is a critical level where price previously faced rejection.
Secondary Resistance: $99,588.01 – This level caps further upward movement, creating a ceiling for BTC in the short term.
3. Support Levels:
Immediate support lies around $94,467.11.
A deeper correction could see BTC test $94,196.04, with $85,117.03 acting as a key demand zone if the sell-off intensifies.
4. Bearish Divergence on RSI:
The RSI shows a clear bearish divergence; while the price has been forming higher highs, the RSI has been making lower highs. This divergence signals weakening bullish momentum and increases the likelihood of a reversal.
5. EMA Confluence:
BTC is now trading below the 20-period EMA, signaling a short-term shift in momentum to the downside.
A sustained move below this level would validate further bearish targets.
Trade Setup:
Entry: Short position around $94,500–$94,800, ideally after a retest of the broken wedge support as resistance.
Stop Loss: $96,497.58 – Placed above the recent resistance level for safety.
Targets:
TP1: $94,196.04 – Near-term support.
TP2: $85,117.03 – Key demand zone.
Risk Management:
This setup provides a favorable risk-to-reward ratio. Ensure proper position sizing and stick to the stop loss to avoid unnecessary losses in case of invalidation.
Conclusion:
This short setup is based on technical signals, including the wedge breakdown and RSI divergence, suggesting a bearish continuation. However, always monitor for macroeconomic events and news that could impact BTC’s trajectory.
Stay updated for further developments!
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