Regardless of what’s happening in wider financial markets at the moment, one thing we can say for sure is that the implications of these goings-on for the bitcoin price have made for some pretty wild trading over the last week or so. Having declined considerably alongside bring much every other tradable financial asset heading into the week, bitcoin has recovered somewhat and now trades about $25 ahead of weekly lows. This pretty much puts it in line with global equities markets, suggesting that – from a risk on/off perspective at least – there is some correlation. With this said, however, what are the levels that we are looking at in today’s bitcoin price, and where are we going to look to get in and out of the markets accordingly? Take a quick look at the chart.
As you see, action throughout last night’s Asian session saw price range from yesterday’s intraday highs at 231.032 hit floors of 223.15 this morning. These two levels will serve as in term resistance and in term support respectively for today’s European session. We’re currently trading mid-range, but as part of the overarching overnight trend, we will initially look at the downside entry. If we can get a break below 223.15 (and a close below this level) it would put us short towards a medium-term downside target of 218.64. A stop loss on this one somewhere around 224 flat will keep things tight from a risk management perspective.
Looking the other way, a run past 231.03 to the upside would carve out fresh weekly highs, and would give us a medium-term bullish bias in the market. A close above resistance will put us long towards 235 flat, with a stop loss somewhere around 229.5 defining our risk nicely.
Charts courtesy of Trading View