Over the last few days we’ve seen quite a lot of volatility in the bitcoin price – primarily to the downside – as a number of fundamental developments have drawn outside attention to the space. The sentencing of Ross Ulbricht became global media news on Saturday, and volume picked up on both sides of the equation – bid and ask. With this said, this volatility has translated to some decent opportunities to draw scalp profits from long and short activity in the markets. So, what are the levels that we are keeping an eye on today in the bitcoin price, and how can we enter according to our bias? Take a quick look at the chart.
As the chart shows, after yesterday’s sharp decline around 3:00 PM GMT, we have since traded within a relatively tight range between 220.63 to the downside and 225.96 to the upside. These two levels now serve as in term support and resistance respectively.
We are currently trading pretty much mid-range, but with a slight lean towards the downside, so we will look in this direction first. If we can get a run back down towards 220.63 (overnight lows) we will look for a break below this level to validate a downside target of 215 flat. A stop loss somewhere around current levels (222.70) will keep risk tight enough to make the trade worthwhile.
Looking the other way, if we get a break above 225.96 (in term resistance) it will validate weekly highs at 231.20 as an initial upside target. Plenty of room for a stop loss on this one, as we have got about six dollars worth of reward to play for, so once again, a stop loss somewhere around 222 will ensure we are taken out of the trade in the event of a bias reversal whilst still leaving enough room for a short-term corrective retest.
Charts courtesy of Trading View