Yesterday, in the second of our twice daily bitcoin price watch pieces, we zoomed out to a wider timeframe and took a look at the bigger picture – still intraday, just with a little more perspective. It revealed that the bitcoin price was trading within a relatively confined upward sloping channel, and that at the point of publication, we were somewhere mid range. This opened up the potential for a sustained move in either direction, and I turn, an entry according to our breakout strategy.
Things turned out exactly as planned, and overnight we got an upside break and a bullish signal. We entered long on the break, and drew a nice quick profit target from the action. We’ve not yet reached the upside parameter of the channel we highlighted yesterday, however, so there’s still room for further volatility if we get a decent catalyst.
As such, we’re going to set up a pretty tight breakout strategy framework in and around today’s European morning action, and see if we can’t get a repeat of overnight’s success. The chart below (a 15 minute, intraday chart showing circa the last 24 hours) details the levels we are watching.
As the chart shows, today’s in term support comes in at 416.flat, and the range is rounded off by a 418 resistance. This is one of the tighter ranges we’ve traded, so there should be plenty of opportunity for entry. Intrarange is not an option, however.
So, let’s get to the framework. A long entry will signal on a close above in term resistance. Well target 421 and define our risk with a stop at 417 flat.
Conversely, a short entry will signal on a break and close below in term support, and we’ll look to enter towards 414 flat (highlighted) with a stop at 417 .5 protecting our downside.
Charts courtesy of Trading View