So it looks as though the UK is set to leave the European Union, after its people voted in a slim, but important, majority on the side of the leave campaign. We have said a few times that bitcoin might play a part as a safe haven asset. On a few occasions over the past couple of years, this has proven accurate. Price has gained a global economic uncertainty pushes people to transfer value from one asset, a riskier one, to another, a safer one. Traditionally, this has been to US dollar, then gold. Bitcoin is gaining in credibility among the less mainstream financial space, and this increase has boosted its popularity as a safe haven. So, if this is true, the UK vote should have boosted the bitcoin price, based on the concurrent decline in the value of the Sterling and global equities. Take a look at the chart to see what happened overnight.
As the chart shows, action overnight supported this hypothesis, and price has now essentially reversed off the back of the vote.
How can we use this action for today’s session? Well, the chart is a fifteen-minute candlestick chart showing the last couple of days of action, so with the overlaid framework (read: range in focus) we can figure out our entries and exits to take forward with us.
In term support comes in at 640 to the downside, while resistance comes in at 683 to the upside. It’s wide enough for intrarange, so long at support on a bounce (we may have just missed this trade) and short on a correction from resistance looks good.
If price breaks our key levels, it will signal entry in the respective direction. Long on a close above resistance, targeting 700 flat. Short on a close below support towards an initial downside target of 630.
Happy trading!
Charts courtesy of Trading View
