Yesterday afternoon shortly before the close of the European session, we published our twice-daily technical analysis piece in the bitcoin price. The piece highlighted a couple of key levels we will be watching as we head into the start of US afternoon, and suggested how we might interpret price reaching these levels as far as forming an overnight bias is concerned. Now action overnight has matured, what are the levels we’re looking at on Wednesday, and how can we take a position on any potential volatility? Take a quick look at the chart.
As the chart shows, overnight action – while choppy – has been decidedly bearish in the bitcoin price. We have repeatedly made lower highs and lower lows, suggesting an overarching downside trend. We now trade between what serves as in term support at 250.13 and resistance at 254.56 medium-term. These are the two levels we will be watching in order to form our intraday bias.
If the overarching trend continues, we will likely see 252.1 feet before we hit in term resistance. If we can break below this level, it would validate an initial downside target of 250 flat, with a stop loss just ahead of 252.50 ensuring we are taken out of the trade for just a small loss in the event of a bias reversal.
Looking the other way, if current levels hold, and we see a medium-term trend reversal, we will look for a break above 254.56 to validate 256.06 medium-term. In this scenario, a stop loss somewhere around 254 flat would present us with a nice risk reward profile in the event of anything unexpected. One thing worth noting, for those looking slightly longer-term, is that we are approaching key long-term support around 251 flat. This means we could see some friction before a downside target is hit, and also could hint at a medium-term reversal of the BTCUSD in the coming few days.
Charts courtesy of Trading View