Earlier this morning we published a piece highlighting the action in the bitcoin price overnight, and suggesting some of the levels we would be using to form a bias as the day matured. Now the European session is drawing to a close, what are the levels we will be keeping an eye on as we head into the US afternoon? Take a quick look at the chart.
In this morning’s piece, we highlighted the head and shoulders pattern the completed yesterday night, and proceeded to decline towards what now serves as in term support at 252.06. Today, we have seen range action between this level, and in term resistance at 256.51. We had these down as the levels to keep an eye on earlier today, and action in the bitcoin price today means things very much remain the same. Will be looking for a break above 256.51 to refer a bullish bias, and offer us an initial upside target of 260 flat, with a stop loss somewhere around 255.50 ensuring we are taken out of the trade for just a small loss in the event of a bias reversal. If we get a run down towards 252.06, we will look for a break of this level to validate 248 to the downside medium-term, with a stop loss just ahead of 253 offering is favourable risk profile.
With the action we have seen today, we may get in on the range action depending upon the way price behaves around support and resistance. If we see a bounce from support, a long entry towards aforementioned resistance at 256.51 with a stop somewhere around 251 flat could be a nice range trade. Similarly, if we reach 256.51 and correct, a short entry towards 252.06 with a stop just ahead of 257.50 could be a similar, but reverse, entry.