Late yesterday evening, we published our twice-daily bitcoin price watch piece. In the piece, we highlighted a few of the key levels that we would be watching as price matured throughout the evening on Wednesday, and suggested how we might respond to price reaching some of reaching these levels in terms of entering according to our scalp strategy and drawing profit from the market. Now the bitcoin price has matured overnight, what are the levels we are keeping an eye on during Thursday’s session, and how can we apply our scalp strategy to today’s volatility? Take a quick look at the chart below.
As the chart shows, action overnight reached highs of around 267 flat, before reversing to trade towards floors of 224.10. These are the two levels that we will be keeping an eye on today in order to try and forge an entry, with the former serving as in term resistance and the latter offering up in term support during the European session.
We’re currently trading mid-range, so we will look for an initial run up towards 226.97 – and a close above this level on the intraday chart – to validate a medium-term bullish bias with an initial upside target of 230 flat. In this trade, a stop loss somewhere around current levels (226 flat) will maintain a positive risk reward profile and ensuring we are taken out of the trade in the event of a bias reversal.
Looking the other way, if we run down towards 204 24.10, we will look for a break below this level (again on the intraday chart) to bring 220 into play as a valid downside target. If we put a stop loss somewhere around 225 flat, it would give us a close to four on one risk reward profile and make the trade attractive from a risk management perspective.
Charts courtesy of Trading View