Bitcoin Price Lower; Recovery Ahead?

bitcoin price recovery. newsbtc

We’ve had a number of positive fundamental developments in the bitcoin space over the last couple of weeks – specifically relating to financial institutions pitching a stake in blockchain technology. The bitcoin price has reflected this, with these developments translating to some considerable volatility. Of course, we like volatility whether it’s upside or downside – from a short term perspective at least. Longer term we’d prefer our holdings to appreciate in value, but if we get a bit of downside short to medium term, our intraday strategy is set up to allow us to draw a profit from the market.

As it turns out, overnight on Wednesday, we got quite a sharp decline in the bitcoin price. Having traded relatively flat for the majority of the evening and late afternoon in Europe, price broke to the downside and ended up bottoming out around 376 flat – a level that (as a result) will feature in today’s approach.

Today we reported that the Bank of America is set to file up to 20 blockchain related patents the the US Patent Office (USPTO) before the end of the month, which will bring its total to somewhere in the region of 35 filed, and this should translate to a bit of upside momentum going forward, Chances are it wont be enough in itself to close the gap on last night’s decline, but it might give us some temporary reprieve. So, with this said, what are we looking at trading today, and where are the key levels that are going to define or range? Take a quick look at the chart below to get an idea of what’s on before we go into detail.

The chart shows the last 24-48 hours’ worth of action in the bitcoin price on a fifteen-minute timeframe. As you can see, the levels that define today’s range are in term support at the aforementioned swing low at 376 flat, and in term resistance at 383.44, which serves as the high point of this mornings correction.

So let’s look at strategy. If we get a break above, and a close above, in term resistance, it’s going to put us long towards an initial upside target of 392.82 – the level through which we broke last night into the decline. A stop loss on this one somewhere in the region of 380 flat gives us enough room to avoid a chop out, while also keeping things positive from a risk reward perspective.

Looking to the downside, if price breaks below in term support at 376 we would expect a sustained downside run. Based on this expectation we are going to be a little bit aggressive with our entry, and target a downside goal of 360 flat. Price broke to 350 last week, and although it was just a spike, 360 looks valid if we get a downside run. This time a stop around 378.5 keeps things attractive on the risk management side of things, and will ensure we don’t get caught on the wrong side of a recovery.

As always, charts courtesy of Trading View.

Happy Trading!

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