Bitcoin Price Tests Resistance; Range Trade Potential

In yesterday’s bitcoin price watch piece, we highlighted the levels that we were keeping an eye on in the bitcoin price throughout Thursday evening, and suggested a couple of the levels would be watching as we entered into this morning’s session.

We also suggested how we might respond to price reaching these levels, and presented our readers with a couple of trade entries and potential risk management parameters that would serve to offer us opportunity in the markets. Now action has matured overnight, what are the levels we are keeping an eye on in the bitcoin price, and how can we draw profit from the market today? Take a quick look at the chart.

As you see, action ranged throughout the majority of the evening, between what now serves as in term support at 234.91 and resistance at 236.99. As we trade today, these are the levels that we will be keeping an eye on primarily.

Initially, we will look for a break above 236.99 (below which we are currently trading by just a few points) to validate an upside bias and an initial upside target of 240 flat. If we do get this break, will put a stop loss somewhere around 236.20, a level that will keep our risk reward profile positive and take us out of the trade in the event of a bias reversal. Looking the other way, if we get a bounce from current levels, we will enter short towards in term support initially, with a stop loss somewhere around 237.5. If we can get a break below 234.91 (in term support) medium-term, we will look to 233.76 as a secondary downside target, with a stop loss around 235.60 ensuring we are taken out of the trade in the event of a bias reversal for just a small loss.

By Samuel Rae

Charts courtesy of Trading View

Source:http://www.newsbtc.com/2015/05/22/bitcoin-price-tests-resistance-range-trade-potential/