At the beginning of this week we saw a sharp decline in the bitcoin price, mirroring last week’s Sunday decline towards 232 flat. Throughout the first few days of the week, some of this decline has abated and we saw some temporary reprieve with consecutive multi-and intraday targets around the 239-241 region. Yesterday afternoon we published a piece highlighting the upward sloping channel and the 240 target implied if we got a strong retest of support. We got this retest, and having reached our noted highs price collapsed into the late US afternoon session.
A quick look at the technicals suggest that this bearish momentum is likely to continue – at least throughout the European morning session – and we could see fresh three-day lows before the day is out. With this said, what are the levels to keep an eye on?
We are now trading in between range resistance at 238 flat and support at 236. These are the levels to watch. We bounced from support a little earlier this morning (as defined by yesterday’s lows) and now look to be trading up towards aforementioned resistance. Action around this level will likely dictate the day’s bias. If we get a confirmed retest (i.e. a failure to break and close above 238) expect a return to our initial downside target at 236 flat. A close below this level would validate a further downside target of 234.
The range offers nice opportunity to implement some strict risk management principles, with the 238.50 – just above in term resistance – a decent stop loss position. Why is this? Because if price closes above 238.50 it is likely that the current bearish momentum is reversing, and we no longer want to be in the trade to the downside. Did you enter on yesterday’s short-term correction and hit our intraday target? Let us know!
Chart courtesy of Trading View