FX.co ★ Trading plan for Bitcoin for February 02, 2021

Technical outlook:

Bitcoin bulls have managed to produce a rally from the $3,850 low registered in March 2020 through $42,000 highs registered last month. The crypto is seen to be trading around the $35,300 level at this point in writing and is expected to either consolidate or test the $42,000 mark before resuming the downward movement.

Immediate resistance is seen at $42,000, while support comes in around $29000 levels respectively. A consistent break below $29,000 will confirm that bears are back in control and that Bitcoin is heading lower towards at least the $18,000 mark. Looking at the short term wave structure, Bitcoin might consolidate within a triangle structure for a while before breaking lower below the $29,000 mark.

On the flip side, it is possible that bulls attempt one last rally towards $42,000 as a technical test or print a shallow high before giving in to bears again. In general, the upside potential remains limited from here and selling on rallies could be a preferred trading strategy.

Trading plan:

Remain short between $35000/37000, stop @ 42000, and target @ 18000

Good luck!