Well, who would have thought it. There have been a few weeks over the last couple of years in the bitcoin price, during which price has soared across a couple of sessions in a row, but none really like what we’ve seen during the last couple of weeks. Price has rocketed from around the 800 mark to where it currently sits – above the 1200 level – and doesn’t look like it’s going to slow down near time.
It’s exciting, but I’m going to put a bit of a dampener on things. Traders need to be careful at these levels. We’re probably going to see some near term strength, purely because it’s this point at which the uninitiated start to try and get in on the action. The wider news media start to pick up coverage on bitcoin as the price rises, and more and more people start to buy in to the asset. We see it in the traditional financial assets, and we’re seeing it now in bitcoin. What this means, of course, is that this run will come to an end soon. The smart money is in, and likely already getting out. The dumb money is just getting in, buying from the smart money as the latter take their profits off the table.
Anyway, enough of that.
We’re looking ultra short term, with some tight risk parameters, to make sure that if and when price does go against us, we’re not caught out.
The chart below shows our range in focus for this evening’s session.
As illustrated, support comes in at 1213, and resistance comes in at 1223. If we see price break above resistance, we’ll get in towards 1233 with a stop at 1219 to kill the trade if price reverses. Conversely, a close below support will signal short towards 1205, and we’ll get out of the trade at 1217 if price goes against us.
Be careful out there…
Charts courtesy of SimpleFX