Anybody that is relatively new to the bitcoin space, as undoubtedly a large number of those reading are, given recent upswing in news media coverage, will be looking at the recent price action and panicking. Especially, if they are holding bitcoin and, even more so, if they bought in above $4000 apiece.
It’s at these times, however, that bitcoin holders need to have the exact opposite attitude. When the bitcoin price swings to the downside, all it really means is that we’ve got an opportunity to pick up an exposure to bitcoin at a discount to inherent value.
Sure, it’s open market activity that dictates price, but fundamentals are going to push the cryptocurrency higher over the coming years and these small dips are something that anybody who has been a long term holder will be more than familiar with.
So, with that said, let’s get some levels put in place with which we can try and draw profit from any volatility we see today. As ever, take a quick look at the chart below before we get started so as to get an idea of where things stand and what happened overnight. The chart is a one-minute candlestick chart and it has our key range overlaid in red.
As the chart shows, the range we are using for the session this evening comes in as defined by support to the downside at 3757 and resistance to the upside at 3832.
If we see a close above resistance, it will signal a long trade towards an immediate upside target of 3860. A stop loss on the position somewhere in the region of 3825 looks good. Looking the other way, if we see price close below support at 3757, we will jump into a short trade with an immediate downside target of 3725. A stop loss on this one at 3775 works well.
Bitcoin price charts courtesy of Trading View