A little earlier on this morning, shortly before the markets opened in the UK, we published our bitcoin price watch article addressing how we would response to price reaching certain levels throughout Tuesday’s European session. The primary focus of the piece was the sharp decline we saw in the bitcoin price overnight on Monday, and the overarching bearish bias – on both a technical and fundamental level – that this forced us to accept.
Now price has matured throughout the European session, and we are about to open on a fresh US afternoon. With this said, what has price action told us today, and how can we interpret it to form a bias going forward? Take a quick look at the chart.
As you can see, since we published our price watch article this morning, the bitcoin price has remained within an even tighter range than we had slated, with our focus levels at 215.09 and 224.83 serving as in term support and resistance respectively. With the relatively flat action we have seen during the European session, the levels we had marked as those to watch earlier this morning remain in force.
Over the past couple of weeks, we’ve seen similar action take place throughout the European session, and many times it preceded a sharp break (to the downside recently) through in term support. With this in mind, our primary technical bias still remains bearish. If we get a break towards 215.09, we will look for a close below this level to validate an initial, short-term, downside target of 210.03. A stop loss just above 215.09 (somewhere around 216.50) will ensure we are taken out of the trade in the event of a bias reversal.
If we do see some intraday strength throughout the US afternoon, and we hit 224.83, we will look closely at action around this level before entering. If we can get a strong close above in term resistance, we may consider entry towards 236.06. However, if it looks as though price is getting rejected at this level, a short entry back down to in term support at 215 would be valid.