Late last night, we published the second of our twice-daily Bitcoin price watch pieces. In the article, we highlighted the fact that a symmetrical triangle was forming in the Bitcoin price, and that action had confined itself within this triangle for the past couple of days. We also noted that—in combination with our standard breakout strategy—we would use this triangle to help us get in and out of the markets overnight.
Action has now matured throughout the Asian session, and as we head into today’s European afternoon, what are the levels to watch, and where will we define our risk and reward? Take a quick look at the chart below to get an idea of what we are looking at.
As the chart shows, we broke out of the triangle to the upside late last night. As per our previous article, this put us on high alert for a break above in term resistance to put us long towards our longer term target of $410. However, post triangle break, we rocketed through this level to reach swing highs of $425, taking out our target, and so things remain neutral – at least for now.
In term support for this afternoon sits at $412.16, while resistance comes in at $425 flat; these are the two levels we are watching going forward. In the same vain as yesterday (but with a different pattern) yesterday, we will look for a break above the channel’s parameters to put us on alert for a long entry, with a close above resistance validating the position. Target $435, with a stop loss at $422 flat to maintain our risk on the trade.
Looking the other way, a close below the support (horizontal trend line) will put us short towards $400 flat. A stop on this one in the region of $414.5 will help us to keep a positive risk profile.
Charts courtesy of Trading View