Action in the bitcoin price last week was primarily dominated by an overarching downtrend, and – despite a number of small and temporary recoveries, we were unable to see a marked return to any sort of bullish momentum. Action over the weekend has been no different, with a series of drops following and preceding short frames of ranging action, and Sunday night saw us carve out fresh lows at 236.50, a level not seen since the beginning of last week. The question now is, is this decline likely to continue, or might we see the recovery we need? Let’s take a look.
The chart shows the action in the bitcoin price over the weekend, and highlights the decline to 236.50 – a level that now serves as in term support. We are trading just shy of key long-term resistance at 246.72 at time of writing, and this is the level to keep an eye on as we head into the European session. If we get a break above 246.72, it would validate a bullish bias with an initial upside target of 253.11. A stop loss just below 246 (somewhere around 245.5) would take as out of a bullish position in the event of a bias reversal.
Contrarily, if in term resistance holds and we get a break towards 240.15, we will look to aforementioned flaws at 236.50 medium-term. There are two ways to play this one. We can either enter short at current levels based on the holding of 246.72 as resistance, with a stop around 248, or wait for a confirmation of the bearish bias – i.e. a break below 240.15 – with a short entry towards 236.50 and a stop somewhere around 241.
Charts courtesy of Trading View