Yesterday afternoon, shortly before the European session closed out for the day in the more traditional asset markets, we published this piece outlining the likely action in the bitcoin price over the following 12 hours. Those 12 hours have now passed, and Thursday morning action is offering up two potentially conflicting biases. Close monitoring of the bitcoin price over the European morning session should serve to validate one of these biases, and could offer us an opportunity to draw a profit on a small scale, intraday level after lunch. So, with this said, what should we be looking for as far as bias validation is concerned, and what are the levels to keep an eye on in either scenario?
First, it’s worth mentioning that having run up towards weekly highs late last night, BTCUSD broke free of its upward sloping channel and corrected towards what now serves as in term support at 291. The question now, is will this level continue to hold, or might we see a break?
If the former, support holds, we could very quickly see a return to the bullish momentum we have seen as part of the overarching trend so far this week. Look for a break through the 294-295 region to cement a bullish bias and validate a medium term target of 297, and beyond this, 300 flat.
If support does not hold, we may get a down day. A break of 91 would validate a medium term bearish bias, and bring 288 into play to the downside. A conservative bearish entry on such a break could be attained by waiting for a retest of broken support as resistance (291) and entering short with a stop just the other side of the key level – somewhere in the region of 292-292.50.
Charts courtesy of Trading View