It is time to get things moving for the final day of the week in our bitcoin price trading efforts and what a week it has been. Across the period, we’ve seen a sharp and dramatic run to the upside followed by an equally sharp, but slightly less dramatic, correction. We did say on the number of occasions yesterday that we were expecting a correction near term. When an asset runs to the upside to the degree that bitcoin has over the last few weeks, a serious correction is almost inevitable. A large portion of the accumulated volume derives from speculative positions, and by their very nature, these positions close out after a relatively short term period. When they close out, it is a symptom of the shorter-term operators pulling the profits off the table, and it often causes a wave of selling, compounding the downside action and creating a steep corrective move. This, of course, is what we saw last night.
So, how can we take what we have seen overnight and mold it into a strategy for our session today? The answer is, relatively simply. As ever, take a quick look at the chart below to get an idea of where we are looking to get in and out of the markets according to the rules of our intraday strategy during today’s session. It is a five-minute candlestick chart and it has our key range overlaid in green.
As the chart shows, the range we are looking at for the session today is defined by support to the downside at 2497 and resistance to the upside at 2598. Regular readers will know that this is a far wider range than we normally go at, but with volatility as it is right now, we have to adapt.
So, we will be in long on a close above resistance towards an upside target of 2630. Conversely, we will be in short on a close below support towards a downside target of 2470.
Let’s see how things play out. Hold on tight!
Charts courtesy of Trading View