Yesterday evening, our primary focus in our bitcoin price analysis was to try and figure out whether price had finally found support, and – in turn – whether this meant we could set ourselves up for a medium-term reversal against the overarching downside trend. We noted that price couldn’t continue to decline indefinitely, and that at some point, markets would have to balance between buyers and sellers, and that chances are, this wouldn’t happen below previous levels – i.e. those from which price rocketed towards the $1300 mark over the turn of the new year.
As it turns out, it seems we were correct. Price does seem to have found some support – for now at least – and bitcoin is slowly but surely regaining some strength against its recent losses. How long this will continue, nobody really knows. Many will probably try and forecast it, but in what is essentially an immature asset like bitcoin (i.e. one that we only really have around six or seven years worth of reliable price data for at most) then these forecasts are just guesses.
What we can do, is set up against the market on a short-term basis, and try and draw equally short-term profits from any volatility. So, with this in mind, let’s move forward into today’s strategy. Take a look at the chart below to get an idea of the levels in focus.
As the chart shows, the levels we are looking at today define our range, and are in term support to the downside at 775, and resistance to the upside at 782. It is a pretty narrow range, so we will be looking at our breakout strategy only for now.
Specifically, if price breaks through resistance, we will enter long towards an upside target of 790. Conversely, a close below support will put us in a short position with an immediate downside target of 767.
Charts courtesy of SimpleFX