Action in the bitcoin price overnight was pretty volatile. Having ranged for the previous twenty-four hours between tight key levels, price broke to the downside and – with a sustained decline, reached overnight lows just ahead of 365 flat. Having reached this level, however, and as the Asian session kicked off it’s Thursday trading, price reversed and made back the entirety of its losses to trade at current levels – circa 373 flat. Our breakout strategy took full advantage of the movement, and we stuck in short to pull a nice profit from the market – a relief after the banality of action a day or so earlier.
When we get range action, especially if its across an expanded period (say more than 24 hours) we generally interpret it as representative of underlying uncertainty – and in turn – a sort of winding up action. The relatively even split between the bulls and bears puts both upside and downside pressure on the price as action plays out and it results in a tight range without much volatility. It sets us up for a sharp move, because a relatively weak catalyst has the potential to tip the balance of bulls and bears,