Shortly before the close of the European session yesterday afternoon, we published our twice-daily bitcoin price technical analysis piece highlighting the action we’d seen during the day (GMT) and suggesting the levels we were going to use as a bias inference. We also projected a few levels to keep an eye on as we headed into the US afternoon session and beyond. Now the bitcoin price action has matured overnight, what will be looking at as we head into a fresh day’s trading, and what can action around particular levels tells about the likely direction of the bitcoin price during the European session? Take a quick look at the chart.
As the chart shows, BTCUSD held the range we highlighted in yesterday’s article until just shy of 6:30 AM this morning (again, GMT) when we saw a break out to the downside and a run towards what looks to be serving as a temporary floor at 238.44. This level counts as in term resistance for the time being. 243.95 – broken support – now turns into in term resistance.
To the downside, we will be looking for a break of 238.44 to validate an initial and medium-term downside target of 235 flat. In such a scenario, a stop loss somewhere just ahead of 239.00 (perhaps around 239.5 to avoid being chopped out) would ensure we are taken out of the trade for just a small loss in the event of a bias reversal.
Looking the other way, there are two ways we can enter to the upside. The first is to enter at current levels, with a stop loss just below 238 and an initial upside target of aforementioned in term resistance at 234.95. This is the more aggressive of the two entries. For more conservative traders, we could look to a break of 243.95 to the upside to reverse the overarching bearish momentum and validate 247.28 (yesterday’s resistance) as an initial upside target, with a stop just below 243 flat.
Charts courtesy of Trading View