Late yesterday afternoon, shortly before the European session closed and as we headed into the beginning of the US session, we published this piece highlighting the day’s action in the bitcoin price and outlining our forecast for the day’s remaining action as we headed into Tuesday night and beyond. Now action has matured, what can we expect from bitcoin price as we head into a fresh day of trading? Let’s take a look.
As the chart shows, the bitcoin price traded in an overarchingly bearish trend throughout the night, confined between support and resistance of a downward sloping channel. At about 8 AM this morning (GMT) the BTCUSD broke out from this channel to the upside, and – after briefly breaking back within its confines – sustained some bullish momentum to trade where we now sit just ahead of 293 flat.
What are the levels to keep an eye on as we head into the European morning session? The two primary levels will be 290.96 (a level that served as both support and resistance over the last couple of weeks) and the broken resistance (now support) of the aforementioned downward sloping channel.
Having got a bit of bullish momentum over the past couple of hours, we will likely now see a short-term correction towards one of these two levels. Watch 290.96 closely as we approach it, and if we get a bounce it would validate 294.12 as an initial upside target. Beyond that, we will be looking to 297 as a secondary goal. If we break below 290.96 on the retest, expect the aforementioned broken channel to serve up a medium-term floor and catalyse an upside bounce on the test. A long entry here would be a nice conservative position to take, with a stop loss just shy of 289 flat ensuring a timely exit in the event of a bias reversal.
Charts courtesy of Trading View