The bitcoin price dipped overnight and early this morning bottomed out and around $5200 apiece. Against the backdrop of some considerable volatility, we’ve got to be really careful with our approach at the moment. Things can turn around pretty quickly and, when they do, we don’t want to be caught on the wrong end of a reversal. This is what our risk management parameters are in place to avoid, of course, so so long as we don’t deviate from our strategy, things should be okay. With that said, however, it’s always better to be cautious, especially in these conditions. So, moving forward, let’s get some levels in place that we can use to try and (carefully) draw a profit from the market. As ever, take a quick look at the chart below before we get started so as to get an idea where things stand and where we are looking to jump in and out of markets as and when things move. It is a one-minute candlestick chart and it has our range overlaid in green.
As the chart shows, the range we are using for the session this morning comes in as defined by support to the downside at 5239 and resistance to the upside at 5371. Regular readers will recognize pretty quickly that this is a wider range than we normally use and this is because of the above-mentioned volatility. Intrarange is an option, so long on a bounce from support and short on a correction from resistance, targeting the opposing levels.
Looking at our breakout strategy, if we see price close above resistance, we will enter long towards an upside target of 5420. A stop loss on the trade at 5360 works well.
Looking the other way, a close below support will have us in short towards a downside target of 5185. Stop loss at 5255.
Charts courtesy of Trading View