In this morning’s bitcoin price watch analysis, we noted that the correction we were seeing in the bitcoin price, while not ideal, was relatively insignificant when considered against the magnitude of the upside run that brought us to trade at current levels.
Turns out we spoke too soon.
Price lost another 100 dollars or so during the session today, having had a relatively volatile overnight session and kicking off the day in and around the 2750 mark. We spoke too soon, but it’s not too much of a problem. Like we’ve said in the past, our downside strategy affords us the opportunity to get into some downside entries and to use these entries as a hedge against the losses we are taking concurrently to our longer term holdings. It’s a sort of options hedge/strategy, but altered a little to make it applicable to the digital currency space.
So, the question now, is, what’s next? We’d love to see the current downside action bottom out and give us an opportunity to get into a long trade on the way back up to highs. It might happen, or it might not, which is why we’ve also got to set up against the other side of the market.
With this noted, then, let’s get some actionable details outlined with which we can approach the market this evening.
Take a look at the chart below.
As the chart shows, the range that we’ve got outlined for the session tonight comes in at support to the downside at 2586 and resistance to the upside at 2640. That’s pretty wide, but we’ll be going for a breakout approach only.
So, if we see a close above resistance, we’ll be in long towards an upside target of 2670. Conversely, a close below support will get us in short towards 2570.
Stops just the other side of each entry will define risk.
Let’s see how things play out.
Charts courtesy of Trading View