It is Wednesday morning, and time to take a look at what happened to the bitcoin price over the night, and how we can interpret this action moving into today’s European session. Yesterday evening, we noted that price has being pretty flat for the majority of the week, and that as a result, we haven’t really had that many opportunities to get into the market. We also noted that this might just be a consolidation phase, and that we could see an unwinding of the consolidation midterm if we get any volume. Volume overnight was pretty thin, but we have a nice defined range and should be able to use the key levels that define the range as solid entry points today. So, without further ado, let’s get into the detail. First, take a quick look at the chart below to get an idea of the levels in focus. It is a 15-minute candlestick chart, with our range in focus outlined in green. The candlesticks on the chart are a 5-minute timeframe candle.
As the chart shows, the range we are focusing on today is defined by support to the downside at 583 and resistance to the upside at 588 flat. This is a pretty tight range, so we will be sticking with our breakout strategy as opposed to bringing our intrarange strategy into play.
If price breaks above, and closes above, resistance, we will look to enter long with an initial upside target of 507. A stop loss on the trade somewhere in the region of 586 works to keep our risk tight and limit our downside.
Conversely, if price break below support, we will get in short towards a medium term downside target of 574. Again we need a stop on this one, and somewhere in the region of 586 (once again) looks like it should do the job.
Charts courtesy of SimpleFX