One of the core concepts behind our approach to the recent volatility in the bitcoin price markets across the last week or so has been caution. The gains seen (primarily early to mid last week, but also over the weekend to some degree) have come around on the back of speculative volume, and as always, speculative volume must – at some point – fold into profit taking. The tough thing is knowing when a correction is just a correction, and when it’s the beginning of a wider market turnaround.
Action overnight looks to have offered up some signs of just this type of turnaround, and much of the gains picked up across last week’s session are now back on the table. SO, with this said, and as we head into a fresh day’s trading in the bitcoin price on Tuesday morning out of Europe, what are we looking to trade, and where are we looking to get in and out of the markets if we see any intraday volatility? As ever, take a quick look at the chart to get an idea of what’s on. It’s a fifteen-minute candlestick chart that illustrates the latest decline/turnaround, and has today’s range overlaid on action.
As the chart shows, the range we are focusing on this morning is defined by in term support to the downside at 678, and resistance to the upside at 714. These are the most recent swing low and high respectively, so they should hold up fine near term.
If price logs a close below in term support, we will look to enter short towards an initial downside target of 670 flat. A stop loss on the trade somewhere in the region of 882 defines risk.
Looking long, if we see a close above resistance we will get in long towards an immediate upside target of 725. Stop at 709.
Charts courtesy of Trading View