In this morning’s bitcoin price watch article, the framework we placed over the market involved two primary elements. The first, an upward sloping triangle. This offered us an opportunity to enter short, if price broke through it. The second was a more traditional range, with our entry points defined as a break and close above or below resistance and support respectively.
Action has now matured across the bitcoin price session, and we’ve had plenty of volatility to discuss in this evening’s analysis. So, here goes. Action today was very much to the downside. Price broke through the lower channel of our upward sloping triangle shortly after we published our first analysis, and as per our strategy, this put us short towards resistance. We immediately saw a sustained run down to this level, and price took out our downside target for a nice profit.
We are currently trading just shy of the support level we defined earlier this morning, but for the purposes of this evening’s analysis, we are going to redefine our range to take into consideration today’s action.
So, take a look at the chart below to get an idea of what we are focusing on this evening. It’s an intraday, candlestick chart on the fifteen-minute timeframe.
As the chart shows, then, the range we are looking at is defined by in term support at 445, and in term resistance at 452. Using these levels, and in line with the strategy we discussed a little earlier, we will look to enter long on a close above resistance, and short on a close below support.
In the first instance, we’ll enter long towards an initial upside target of 458. A stop on this one at 450 flat defines risk. In the second, we’ll enter short towards 440 flat, and use a stop loss at 448 to keep things tight on the risk management side of the trade.
Charts courtesy of SimpleFX