Somewhere around midafternoon out of Europe, the bitcoin price spiked to the upside and broke through 4600, a level we have been watching quite closely recently as one that could be pretty psychologically significant. Almost immediately subsequent to the break, however, price peaked in and around 4625 and started to decline. It fell right back through the level in question and now looks to have set its sights on 4500 flat. There is an immediate downside entry on the cards here, so we’re going to get straight into the detail. As ever, take a quick look at the chart in question before we get started so as to get an idea of what is on and where things stand. It is a one-minute candlestick chart and it has our key range overlaid in red.
As the chart shows, the range we’re looking at for the session this evening comes in as defined by support to the downside at 4550 and resistance to the upside at the above-mentioned highs, 4625. It’s a relatively wide range, but for simplicities sake, we are going to stick with our breakout strategy early evening and avoid complicating things with intrarange entries.
So, if we see a close below support, which is looking very likely given where price is trading right now, we will enter a short trade towards a downside target of 4500 flat. A stop loss on the position somewhere in the region of 4565 will ensure we are taken out of the trade in the event of a bias reversal. Looking the other way, and on tonight’s potential upside trade, if we see the bitcoin price run back up toward highs and close above the above-mentioned resistance at 4625, we will jump in long towards 4665. A stop loss on this one at 4615 works well.
Let’s see what happens.