Understanding Bitcoin’s Price Behaviour
Looking at recent Bitcoin price movements, we saw a burst of hype that pushed BTC to new all-time highs on some exchanges, followed by a sharp downside retracement. This was then accompanied by another attempt to break resistance, which ultimately failed. It’s also worth noting that Bitcoin has a history of experiencing drawdowns over weekends.
Given this pattern, Bitcoin may continue moving sideways within its current range, finding support around $18,500 and consolidating before making another attempt to break the $20,000 resistance. Still, trading always carries inherent risk. Traders should never risk more than they can afford to lose and should consistently apply sound risk-management principles.
In situations like this, we practise risk management by setting up a rule that hedges against a potential correction in Bitcoin’s price. This rule opens a short position if the MA(9) is below the MA(50) and if the MA(9) is still above the price on the same timeframe. Structuring the rule this way allows us to hedge part of our exposure, creating the potential to profit whether Bitcoin moves up or down.
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