Yesterday’s action in the bitcoin price came as a result of a few key fundamental factors putting pressure on the BTCUSD, and initiating a larger than usual volume of selling. The closing of a digital currency marketplace and an exchange within 24 hours of one another, and what looks like turning out to be many digital currency holdings lost by individuals, has translated to a lower bitcoin price today – but can we recover? Is this simply a fundamental move – one that, in time, the market can brush aside? The answer, of course, is that we don’t really know. However, there are a few key technical levels in the BTCUSD that we can look at for clues as to where the intraday action might take us. Take a quick look at the chart.
The chart shows the decline, and an overnight descending triangle forming in the bitcoin price at what we hope is the floor of the event driven downtrend. We broke out of the upper channel of this triangle around 7 AM this morning (GMT) and a rally towards 262.5 brings us to trade just shy of this level at present – somewhere around 260 flat. We may see price retrace from this level back down towards the triangle’s upper channel, a scenario that would offer up a primarily bearish bias any means the end of the week.
Conversely, we may see a break of 262 swing highs, followed by retest as support. In such a scenario, we would look for a break above 268.052 validate 27 5.54 to the upside as a medium-term target. If yesterday’s action proves anything, it is that a well-placed stoploss can be the difference between a small loss and a disastrous position. With this in mind, a stop below 262.59 on a long entry with a break, or just above this level on a short entry from a retest as resistance would serve us well.
Charts courtesy of Trading View