The European session is about to draw to a close, it’s time to take a second look at the action seen in the bitcoin price market today. In this morning’s analysis, we noted that price has declined considerably across the last few days (when looked at in comparison to last week’s action) and that this was likely as a result of a combination of fundamental factors and also some level of selling volume as speculative long positions unwind. So, with this said, how can we use the action and volatility that we have seen today as a yardstick for tonight’s trading? To get an idea of the range we are focusing on, take a look at the chart below. It is a 15-minute candlestick chart that shows the last 24 hours worth of action – specifically, the decline in question and the subsequent range trading seen earlier this morning.
As the chart above illustrates, bitcoin price action today has been relatively flat, and has traded well within our predefined range. For this reason, we are ok to maintain our range heading into this evening’s session. Specifically, we are holding support to the down side at 540 flat, and resistance to the upside at 600 flat. We said it this morning, but we will say it again, this is a very wide range, so an intrarange approach is perfectly reasonable. Long at support and short at resistance with a stop loss just the other side of the entry to keep things tight.
Looking at the market from a breakout perspective, if price closes above resistance, we will look to enter long on the close towards an immediate upside target of 610. A stop loss on this trade somewhere in the region of 595 works to define our risk nicely.
Looking the other way, if price breaks below, and closes below, support, it will signal a short entry with an initial downside target of 530. Again, to ensure we don’t get caught on the wrong side of a reversal, we need a stop loss on this trade. Somewhere in the region of 545 looks good.
Charts courtesy of Trading View