During Monday evening’s Asian session, the bitcoin price initially gained strength to reach overnight highs of 232.46. However, having reached these highs, the market formed something of a head and shoulders pattern and subsequently broke down to just ahead of where we currently trade, with overnight lows (and lows heading into today’s European session) of 227.49. The bitcoin price has been pretty volatile over the past few weeks, and it looks as though we are set to see a continuation of this volatility as we head into a fresh session’s trading. With this said, let’s get some levels defined so we can take advantage of any movement in the bitcoin price if – and when – we get it. Take a look at the chart.
As you see, the levels highlighted are the levels we just mentioned. In term support sits at overnight lows at 227.49 and resistance at 232.46. These are going to be the two levels that we keep an eye on during today’s session.
Since the overarching momentum seems to be to the downside at the moment, we will initially look for a break below 227.49 to put us short towards a medium-term downside target of 224.37. There are about three dollars worth of reward to be taken here, so a stop loss that puts us about one dollar above entry is valid – somewhere around 229 flat should do the job.
Looking the other way, a bounce from current levels will offer up one of two things. First, we can enter long towards in term resistance for an intra-range trade, with a stop loss just short of 226 flat. Second, we can wait until we reach in term resistance and a little longer breakout past 232.46, with a medium-term upside target of 235 flat. A stop loss on this one around 231 flat should keep things attractive from a risk management perspective.
Charts courtesy of Trading View