Shortly before European markets closed for the day on Tuesday, we published a piece highlighting the day’s action in the bitcoin price and offering up our suggestions for what would become the levels to keep an eye on as we headed into the evening (GMT) and beyond. The bitcoin price collapsed throughout the day, marking the third considerable decline in as many days, and our primary bias was – reluctantly – a bearish one. Action throughout the night has validated this bias, and further decline now brings us to trade just ahead of 236 flat – a level we have not seen since the end of February, representing fresh monthly lows for March. With this said, what are we watching as we head into Wednesday’s European session? Take a quick look at the chart.
The chart highlights the decline, and shows that we are now trading between in term support at 236.40 and resistance at 241.79. As we head into the day, these are the levels to keep an eye on. If we trade up to 241, one of two things will likely happen. First – and the more likely – is that will see a correction from this level back down towards aforementioned in term support. It is from this point that we will be looking to trade. If we close below 236, it would represent a bearish break out from the range, and we will be entering short towards 230 flat with a stop loss just above 236 (somewhere around 237 flat) to ensure we are taken out of the trade in the event that the bitcoin price returns to range between support and resistance. Contrarily, if we get a bounce from support, we will enter long with an initial target towards 241.79. If we break above this level, we will look to 252 as a secondary – medium-term – goal. Once again, a stop loss (this time placed just below 241) will ensure we are taken out of the trade in the event that we return to a bearish bias.
Charts courtesy of Trading View