A little earlier on this morning we published a piece highlighting the ascending triangle that formed in the bitcoin price early Monday morning, and the potential bullish momentum that this ascending triangle inferred. We suggested that – upon pattern completion – a target of 283.50 would be initially valid, and if we can break above this, it would suggest further bullish momentum. A look at the chart shows the pattern completing shortly before lunch (GMT) and the ensuing run towards our initial target. We hit the target in the last 15 minutes or so, so where are we looking for the bitcoin price now? Let’s take a look.
As mentioned, a break above 283.50 would likely infer some further bullish momentum. However, with such a run in a short space of time, we often see a short-term correction. For this reason, we expect a brief decline towards 281.5 before the close of the European session. This will be the level to watch in the event of such a correction. If we can remain above this (i.e. a successful retest of this level as support) then we will look higher with an initial target of 285 flat, and beyond that, 290.
A break below 281.5 would suggest that intraday traders are covering long positions and taking profits, and – in turn – could hint at a broader medium-term correction. In such a scenario, we don’t expect a decline past broken ascending triangle resistance in the 279 region.
To protect yourself against such a bias reversal, a stop loss below 281.5 (somewhere in the 281 flat region) would ensure a quick exit in the event of a fundamentally driven decline.
Charts courtesy of Trading View