As far as rough days in the market go, this has been one of the worst. We noted in this morning’s bitcoin price watch piece that the action we’ve seen over the last few days in the market had been a bit difficult to trade. Action has been up and down, and pretty choppy, and it’s this sort of volatility that can sometimes be great, and sometimes torturous.
We have managed to pull a couple of profitable trades out of this sort of bitcoin price action, but only by keeping our targets extremely tight and maintaining some even tighter risk management principles. Well, today we tried to do the same, but things haven’t worked out as well as we’d hoped. Price broke through our predefined support level shortly after we published our first analysis and this gave us a short entry signal. We got in, and drew a decent profit, but couldn’t really achieve much post-entry, as things started to stagnate.
Action over the last few hours has seen the bitcoin price stage a recovery, and we’re now looking like we may see 1,000 broken (who’d have thought we were looking at 1,100 just a few hours ago!) to the upside this evening, but nothing is confirmed.
Anyway, let’s try and sort out some levels for this evening, and see if we can right the ship somewhat moving into this evening’s session. Take a look at the chart below – it shows today’s action and has this evening’s parameters overlaid in green.
As the chart shows, we are widening out our range a little to accommodate today’s swings. In term support now comes in at 974, while resistance sits at 987 flat.
If price breaks support, we will look to enter short towards a downside target of 965. If we get a break to the upside, and a close above resistance, we will get in long towards 1,000. Stops just the other side of the entry to define risk.
Charts courtesy of SimpleFX