After the flash crash in the bitcoin price on Friday, sentiment looked like it was set to weaken considerably heading into the weekend. Price took a real dive and flirted with the 4000 level, pointing to the potential for some weekend weakness that could have broken any number of key support levels along the way. Moving forward, however, it looks as though our initial concerns are somewhat unfounded.
Price has staged something of a recovery over the last couple of days and the downside pressure seems to be lifting a bit. With any luck, the session today will bring with it a wave of buyers looking to jump in and pick up an exposure at a discount and, in line with this buying volume, we should see price start to run back up towards the 5000 mark.
So, ahead of any of this sort of action, let’s get some levels in place with which we can take advantage of any volatility that comes our way. As ever, take a quick look at the chart below before we get started so as to get an idea of where things stand and where we are looking to jump in and out of the markets according to the rules of our intraday strategy today.
The chart is a one-minute candlestick chart and it has our key range overlaid in red.
As the chart shows, the range we are looking out for the session today as defined by support to the downside 4156 and resistance to the upside at 4206. We will initially look for a close above resistance to validate an upside entry towards a target of 4240. A stop loss on the trade at 4190 works well.
Looking the other way, a close below support will have us in short towards 4110. A stop loss on this one at 4164 does the job nicely.
Chart courtesy of Trading View