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Yesterday evening, we noted that action in the bitcoin price had been relatively flat across the last few days, and that the consolidation may mean we were setting up for a big move. As things turned out, we got just that – though not to the upside as our fundamental bias suggested we might. Instead, we got a sharp downside shift, one that brought the bitcoin price to carve out fresh lows, and give back the majority of the gains it has made across the last seven days. Whether this downside momentum will continue remains to be seen – the end of the week has traditionally been relatively quiet, and so we might just say a return to the consolidatory action and a second coiling in price as we head in to the weekend. Either way, we’re going to set up against the market using our standard breakout framework, so we will be ready to take advantage of action whatever way it comes.
The chart below is a fifteen-minute intraday candlestick chart, illustrating the last forty-eight hours worth of action in the bitcoin price, with the aforementioned decline highlighted and our framework for today’s session overlaid.
As the chart shows, the range we are looking to trade for today’s session is defined by in term support at 412.85 (overnight, and the most recent, swing low) and in term resistance at 414.85.
We will look to enter long on an break and a close above in term resistance, and target an upside of about four dollars towards 419 flat. A stop loss on this one somewhere in the region of 413 should keep things solid on the risk side of things.
Looking the other way, a close below support signals a short entry towards 408 flat. A stop at 414.5 defines risk, and keeps our downside protected on the position.
Charts courtesy of Trading View
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