Action in the bitcoin price has been volatile to say the least over the last few weeks, but we seem to have entered a 48-hour period of calm during the last couple of days during which – following a sharp decline on Monday night, we have seen nothing but pretty flat range action coupled with the odd invalidated breakout. From a trading perspective, this makes things difficult, as without any sustained runs it is easy to get chopped out and quickly find yourself on the wrong end of a bias reversal. However, as usual, we will maintain our strategy going forward and ride out this drawdown period.
So, with this said, how did the levels we highlighted yesterday (GMT) actually play out, and what are we watching today as a form of bias inference as far as key levels are concerned? Take a quick look at the chart.
As the chart shows, we did get a break out to the downside through yesterday’s in term support late Tuesday evening (again, GMT), but we quickly reversed to trade back within our overnight range – with in term support at 217.32 and resistance at 222.36 becoming the levels that now define this range. These are what will be watching as we go forward throughout the European morning. If we once again break back down below 217.32, it will signal a short entry towards an initial downside target of 210.03. A stop loss around current levels (somewhere around 218.5) would serve to minimise any potential losses in the event that the current choppy action continues.
Looking the other way, if we get a break above in term resistance at 222.36, it will signal a long entry towards an initial upside target of 228 flat, and beyond that, 231.66. As far as the long trade is concerned, a stop loss around 220 flat would give us a nice risk reward profile.
Charts courtesy of Trading View