Towards the end of last week, we published a bitcoin price piece detailing the action in the BTCUSD throughout Friday, and highlighting a few key levels that we would be keeping an eye on as action in the bitcoin price mature over the weekend. As we kick off a fresh week of trading, what is this action told us about the likely future direction (intraday) of bitcoin price, and what levels should we be watching to help us infer our medium-term bias? Take a quick look at the chart.
Bitcoin Steadily Gained Strength
As you can see, bitcoin price steadily gained strength over its US counterpart throughout both Saturday and Sunday, and – having reached highs at 262.95 early this morning (GMT) – we have since corrected to trade at the daily low of 257.71. This, alongside in term resistance at 260.02, is the level to keep an eye on. Action around current levels will enter it entered at movement from the rest of the day. If we see a bounce from 257.71 (in term support) we will look for a close above 260.02 to infers upside bias and validate 262.95 an intraday initial target.
Conversely, if we break below in term support at 257.71, it would suggest we may see further weakness throughout the European session. A close below this level would bring 254.93 into play medium-term, and beyond that, weekly lows at 251.50.
In the first scenario, a stop loss just below 260.02 would present up with a nice upside risk profile, and ensure we are taken out of the trade for a small loss in the event of a bias reversal. Conversely, looking the other way, a stop loss somewhere around current levels (258) on a short trade towards 254.93 would do the same.
Charts courtesy of Trading View