Earlier today we published a piece highlighting the likely action of the bitcoin price as the BTCUSD matured throughout the European session. The primary pattern we highlighted was the downward sloping channel that formed from last night’s highs just shy of 285 flat. We theorized that one of two scenarios would occur, and that this scenario would define price action as the European session closed and the US afternoon session began. So, with this said, how did the bitcoin price mature throughout the day, and what should we expect over the coming few hours? Let’s take a look.
The primary hypothesis of this morning’s analysis was that we should wait for a break of the downward sloping channel, and use this break to form an intraday bias. We got a brief and failed break to the downside around UK lunch, but action quickly reversed and returned to trade well within the downward sloping channel. Quick gains then broke resistance to the upside, and we ran upward towards our earlier stated target of 285. Having reached just shy of this (around 284 flat) we have since declined to retest a combination of in term support at 277.35, and the downward sloping channel’s broken resistance (now serving as support) around 276 flat. These are the two levels to watch.
If we can remain above 277.35 (bear in mind that we may see further decline and a test of this level over the coming half an hour) we should see another run up towards the day’s highs just shy of 284 flat, with a break of this level validating 285 longer-term. However, a break below 277.35, and a further break of the top trendline of the downward sloping channel, could reverse the current short-term bias and validate a downside target. While we believe there is not too much downside space available, we will be looking at 274 as an immediate support area in the event of such a break.