Long bitcoin setup underpinned by unwind of US recession bets

Bitcoin is getting obliterated. But if risk appetite suddenly returns, it’s unlikely to stay that way. Having fallen into overbought territory on RSI (14) and with the price testing former resistance at $52956, i’m interested to see whether there’s any buyers lurking below. So, I’m going to see what happens around this level in the near-term.

If the price bounces back above, buy with a tight stop below for protection. Make sure you pay close attention to position sizing given the lift in volatility. If the trade works in your favour, consider using a trailing stop to protect against sudden reversals.

The idea is centered around ultra-short-term positioning ahead of the important US ISM services PMI released later in the session. With bitcoin already off more than 15% for the session, there may be a temptation to pare bearish bets ahead of it given the risk we may see a stronger number that would likely spark a reversal of recession trades.

Set an appropriate target based on your risk tolerance, although if the price can fall 15% in a session on recession fears, it could conceivably rally by the same amount should those concerns be misplaced. The 200-day moving average is located at $55356, so that may be the first port of call.