Yesterday morning we highlighted the fact that the bitcoin price had formed an ascending triangle at the bottom of what we deemed to be a medium-term downtrend on an intraday timeframe. As the European session closed, we published another piece that indicated the validation of the pattern, and the forming of a longer-term upward sloping channel that confirmed the reversal of the intraday downside bias and offered us an upside trade.
An intraday look at the bitcoin price now offers up – longer-term at least – a pretty similar story. However, we are approaching considerable resistance and may be in for a short-term correction. As the chart shows, the bitcoin price has risen between a relatively standard upward sloping channel over the past 48 hours. We are now trading just shy of highs hit on Tuesday at 249 flat. This, in itself, serves as resistance, but on top of that, we are also approaching the upper trendline of the aforementioned upward sloping channel. This double resistance suggests that – over the next couple of hours – the BTCUSD will likely decline towards support at the lower channel, somewhere around 244-245.
Fundamentally we have had no real major news (apart from the latest Chinese Ponzi scheme incident) and so it is likely that the technical levels will hold. With this in mind, look for the aforementioned 244 to serve as strong support and – if hit – offer up a bullish bias towards 249 flat. A close above this level would bring the next key level – seen on Valentine’s Day – into play, at 251.
As ever, we must be aware that fundamental releases can invalidate the technical bias of an illiquid asset such as BTCUSD, and so strict risk management principles must be adhered to. The risk of an entry at the lower trendline of the upward sloping channel could be mitigated with a stop loss just shy of 244.
Charts courtesy of Trading View
