Short trade ideas
Short Bitcoin and target this week’s low at $21,898.
Put a stop loss at $23,400, which is near the 25-period WMA.
Long trade ideas
Buy Bitcoin if its price moves above $23,400.
Put a take-profit at $24,000.
Put a stop-loss at $22,385, the lowest level on December 22
Bitcoin price is hovering near its all-time high, supported by a relatively weaker US dollar and high demand from XRP defectors. The world’s biggest digital currency is trading at $23,000, which is higher than this week’s low of $21,898.
Weaker dollar supports Bitcoin
The US dollar has been under intense pressure over the past two days as market risks ease. For one, US legislators passed a closely-watched $900 billion stimulus deal after months of contention.
Further, scientists believe that the existing coronavirus vaccines will be able to deal with the new mutation of the virus.
Additionally, a deal between the European Union and the United Kingdom seems imminent while more countries have started allowing truckers to the UK.
Meanwhile, data from the United States has been mixed. While the number of Americans filing for jobless claims fell last week, other numbers were less pleasing. Existing and new home sales, personal income and expenses and durable goods orders all dropped in November.
Subsequently, the US Dollar Index has dropped by more than 1% in the past few days. In most periods, Bitcoin price tends to do well in a period of a weaker dollar. For example, this year, its price rose to an all-time high as the USDX crashed to the lowest level in more than 2 years.
Defections from Ripple
Bitcoin price is also steady partly because of the overall defections from Ripple, the embattled digital currency. Many cryptocurrency exchanges have paused offering XRP after the SEC launched a lawsuit against Ripple.
The regulator says that Ripple offered a security without following the legal process. As a result, many Ripple investors have shifted their resources to other digital currencies, including BTC and ETH. Indeed, its price has dropped by more than 67% in the past few days. At the same time, as shown below, Bitcoin dominance has rallied to its all-time high.
Bitcoin price technical outlook
On the hourly chart, we see that Bitcoin price has remained steady in the past few sessions. It is trading at $23,000, which is higher than this week’s low of $21,900. It has also moved below the 25-period and 15-period weighted moving averages. It also seems to have formed a double-top pattern near its all-time high of $24,230.
Therefore, today, the price will possibly continue falling as bears target the weekly low at $21,898. This trend will be invalidated if the price rises above $23,400, which is slightly above the 25-period WMA.