As the markets closed yesterday afternoon, we published the second of our twice-daily Bitcoin price watch pieces. In the article, we noted that—as a response to the upside momentum we had experienced overnight—we should be very careful with our upside trades.
Why? Because we expected some profit taking as the speculators took their medium term earnings off the table. Action has now matured overnight and, low and behold, we got exactly what we expected. Having topped out somewhere in the region of $465 overnight, the Bitcoin price collapsed to intraday lows in the mid $430s before recovering the 20 or so dollars that brings it to trade at current levels—just ahead of $456.
This puts us in something of a precarious position. We know there will be friction as we once again return to trade in and around the levels from which we corrected last night, but we also know that a lot of the short-term speculative capital is already off the table. This latter fact could help pave the way for an upside breakout a little later on today.
So, with this in mind, and as we head into today’s European session, what are the levels that we are keeping an eye on, and where can we look to take advantage of movement in either direction if it comes around? Take a quick look at the chart to get an idea of our focus range.
As the chart shows, the two levels we are watching for today’s session are in term support at $452.92, and in term resistance at $464.89. These are our breakout areas going forward.
If we get a break (and a close) above in term resistance, it will put us on for the aforementioned upside break, towards an initial upside target of $470 flat, with a stop just the other side of our entry defining risk. Similarly, if short we close below support with a stop just above, and a downside target of $445 flat.
Charts courtesy of Trading View