In this morning’s analysis, our primary focus was taking advantage of the volatility we expected to come after the action we saw last night. The bitcoin price has been relatively flat for the last few days, but overnight we saw this flat action breakout, and we finally got some momentum underway. During this morning’s European session, and as expected, this momentum continued to materialize. Price broke to the downside recently, and we managed to get in and out on a downside trade as per the levels we outlined this morning for a nice short profit. We are in something of a tricky situation right now, however. Price corrected quite substantially from its afternoon lows by way of a bounce, and this has left us with a pretty wide range for this evening’s session. It’s not too big a deal, but it means we’re going to have to trade a little wider than we would normally like. So long as we keep our stop losses tight, however, this isn’t a concern. So, moving forward into this evening’s session, here are the levels in focus, and where we are looking to get in and out of the markets according to our strategy. Take a look at the chart below before we get started.
As the chart shows, the levels we are looking at, and those that define this evening’s range, are support the downside at 839, and resistance at 864. We will initially look for a break above resistance (because we’re trading just below resistance right now) to put us in a long trade towards an immediate upside target of 818. Wider range, wider target. A stop loss on the trade at 860 works well. If price breaks below support, it will enter towards 830. Again we need to stop us on this one, and somewhere in the region of 843 looks good.
Charts courtesy of SimpleFX