BUY BITCOIN
Every day we try and use the action seen in the bitcoin price during the last twenty-four hours or so to formulate a strategy we can use to draw a profit from the markets during the subsequent twenty-four hours. Yesterday afternoon, shortly before the markets closed in Europe, we noted that action in the bitcoin price had been particularly sporadic, and that heading into the Asian session we were going to keep things tight, especially from an upside perspective. Our bullish trades have been pretty unsuccessful as late – not in the sense that we haven’t seen any upside action, but more as a result of our stop placement. We’ve tried to keep our risk defined as pretty tight, and this has led to us being chopped out on more than one occasion. This said, we are not about to change our strategy just because of a few chops. Indeed, that’s exactly what our stop loss is there for. We’d rather be taken out of a few trades for the small loss afforded to us by a tight stop that get on the wrong side of a unrecoverable loss. As we head into the latter half of the European afternoon today, things are going to remain relatively unchanged. We did get some bearish action last night, and it has brought is to trade just ahead of what look to be fresh weekly lows, so our tight upside risk parameters are well worth maintaining going forward. Similarly, we will look to keep things tight from a downside perspective in case current levels serve as strong support (they may well do, with them being medium term lows) and we get some resurgence in the bitcoin price tonight. So, with this said, let’s take a look at the key levels we are watching this evening, and try and formulate a strategy ahead of tonight’s action. First, get a quick look at the chart to see the levels that define our range.
As the chart shows, we are currently trading circa mid range between what serves as in term support (and the aforementioned lows) at 424.42, and in term resistance at 434 flat. This latter level also represents the most recent swing high. These two level’s are wide enough for us to bring both our intrarange strategy and our breakout strategy into play, so let’s look at both approaches in tandem.
First then, the upside. If we close above in term resistance it will give us a nice excuse to enter long on a pretty aggressive long term trade towards 447 flat. We’ve got plenty of room for a stop here, and current levels (circa 429) looks to define our risk nicely on the position. If we correct from resistance, we will go short towards in term support with a stop just above 434.
To the downside, a close below in term support will put us short towards 418 flat. This is a slightly less adventurous trade than our upside entry, and a stop around 426 should work nicely. From an intrarange perspective, a bounce from support will put us long towards resistance, with a stop just below our entry defining our risk.
Charts courtesy of Trading View
