So that’s it — the overlong and overdue flat range was finally broken today, but with a jolt. As the order books continued to go thin, and volatility remained lower as ever, somebody turned butter finger and shorted a massive chunk. This led to a series of speculative short positions which resulted in the invalidation of our psychological support, the 600 fiat mark.
The scenario was aptly speculated by Samuel Rae, as can be seen in his last week’s analysis. We will stick to what he said to better understand this “short-term cascade effect”. But before that let’s have a look at the levels we have drawn in this intraday 4H BitStamp chart.
As you can see, the recent pullback has prompted us to revise our range, in which 593-594 fiat (overlaid in blood red) serves as our in-term support and 600 fiat as in-term resistance (in blue). This is once again a tight range, and we will again rely on scalp trading positions to get whatever profit we can get from the market.
The cascade effect has put us on back-foot — we are expecting Bitcoin price to go further down, towards our immediate downside target near 589.77 fiat. A further slip will instantly bring 584 back in sight, while establishing the overall bear control on the market. Our stop during the downtrend will remain near 595 fiat.
Conversely, a bullish correction will have us put a long position towards 600 fiat, which we believe will be pretty easy to achieve considering the past Bitcoin price action. A close above the resistance line will further signal a bullish trade towards 609 fiat – an ideal upside target. Our stop loss in this case would remain near 591 fiat.
Meanwhile, we recommend you all to stay updated with market’s response to FOMC meeting. Happy trading!