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Bitcoin Price Suffers Event Driven Decline – Now What?

Avatar Samuel Rae 5 years ago

Earlier this morning we published our technical analysis piece highlighting the downside momentum we saw in the bitcoin price overnight, and suggesting two potential conflicting biases that could play out as the day matured. Soon after the analysis was released, however, a couple of fundamental factors took control of price action, and weighed heavily on the BTCUSD throughout the European morning session. As we are heading into the start of the US afternoon session, how should we interpret this decline in the bitcoin price, and is it possible to draw profit from such volatile action? Let’s take a look.bitcoin price

The chart shows the breakout, and the resulting run towards 268 flat as a direct result of a bitcoin exchange closure and reports that digital currency marketplace Evolution had closed, escaping with its clients’ escrow holdings. We’ve spoken with a number of our users in the past about the importance of applying strict risk management principles when a low liquidity asset such as BTC, so hopefully you either got in on the downside bias has presented by the breaking of channel support or were quickly taken out of any long trade through the advent of a well-placed stop loss.

Aforementioned 268 flat now serves as the level to keep an eye on to the downside, with 276 serving as interim resistance and 280 a secondary resistance level. Watch action closely around 276. If we get a test and a bounce back down, it would suggest that we are in for further bearish momentum throughout the US afternoon session. In such a scenario, an entry towards 268 support with a stop loss just above 276.79 (278 flat, for example) could offer a nice risk profile for a short-term trade. If we close strongly above 276, look to 280 flat as an initial upside target.

Charts courtesy of Trading View

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