So, this afternoon we are going to try something a little different. The Bitcoin price has been pretty active over the last few days, and with a number of up and down swings giving us some breakout action, we’ve been able to pick out some decent trades. However, over the last 24 hours or so, things have tightened up a bit. It looks as though the market is in a consolidation phase, and this gives us an opportunity to widen out our range and bring our intrarange strategy into the mix. So, with this said, here are the levels we are looking at today, alongside a brief risk management analysis. As ever, take a quick look at the chart to get us started.
As the chart shows, the two primary parameters we are watching this afternoon are in term support at 356.20 (this is derived from the most recent swing low) and in term resistance at 370.59 (defined by the most recent swing high).
We are currently trading mid range, but we will look for a correction from in term resistance, i.e. price hitting 370.59 and reversing to the downside) to put us in a short trade with a downside target of in term support. A slightly more conservative target could also be mid range, with a two-tiered approach.
Similarly, but conversely, we will look for a bounce from in term support at 356.20 to validate an upside entry, with (once again) a two-target approach. First target somewhere in the region of 364 flat, second target at resistance.
On both trades, a stop loss placed just the other side of our entry (i.e just above resistance on the short trade and just below support on our long trade) should define our risk nicely, and help us to maintain a positive risk reward profile on the entries.
Charts courtesy of Trading View