Its that time again – where we take a look at what happened overnight in the bitcoin price in an attempt to decipher the likelihood of some volatility today. We’ve seen some erratic movement over the past week or so, with large moves during the overnight Asian session preceding consolidation, and in turn, range bound action during the European session. Are we set for more of the same today, or is the trend reversed? Further, and in response to either scenario, can we bring our strategy to the fore and draw a profit from the market? If we get some action, then of course! So, with this said, what are we looking at today. And where can we look to get in and out of the markets on any such action? As ever, take a quick look at the chart below.
As the chart shows, action overnight mirrored exactly the pattern we described, albeit a little delayed on the standard timeframes. The bitcoin price waited until shortly after daybreak UK to break to the upside, and reached highs of 435 flat before correcting to current levels just shy of these highs. As such, in term resistance for today comes in at 435 flat, with in term support coming in at the broken resistance last night – 424.23. These are the two focus parameters that define today’s range.
We will look for a close above in term resistance to validate a medium term upside entry, with an initial upside target of 440 flat. A stop loss somewhere in the region of current levels, or perhaps just below, will keep things attractive from a risk management perspective.
Looking the other way, if we get some give-away and the bitcoin price corrects, look to a close below 424.23 as a validation of a short side entry towards 413.99, with a stop around 428 defining our risk.
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