ForexMinute.com — Last 24 hours in the cryptocurrency market saw Bitcoin extending its bearish correction, while breaking below a key support level to enter a new range south. Before going down during the yesterday’s trading session, the digital currency had a smooth bull run which eventually established an intraday high near 241.43 fiat.
In our previous analysis, we had briefly anticipated such a bearish price action, and, therefore, had suggested a few risk levels as our exit points should the volatility take place. As a result, we were able to draw out a decent profit from our short positions, and quickly paused our trades after the extension of the prevailing downside action. And as we can notice, the range we discussed yesterday has been invalidated and we are now looking at new trading parameters. What are they? Let’s check out:
Bitcoin 4H Chart
The price has now entered a new range, in which our previous support line near 236.63 fiat is now serving as the in-term resistance, and 233.64 fiat as our in-term support level. Considering the choppiness, we will be looking at these two levels while crafting our range trading options.
According to the technical indicators, Bitcoin price is now in a near-term bearish bias. The 4H BitFinex chart above clearly displays how price is just marginally above its 50H SMA, and the RSI near 50. While these indicators jointly indicates a reasonable selling pressure in recent hours, the MACD indicator is maintaining its positive bias albeit being below its signal curve.
We are therefore expecting price to uphold its bearish action for next few hours. Nonetheless, we have kept our risk levels at place to avoid any potential loss in this choppy Bitcoin market.
We will first be waiting for price to test its in-term resistance level. In case it happens, we would put a quick long trade towards 237.44 as our medium-term upside target. On this trade, our stop loss would be near 235.95 fiat to maintain positive returns.
Looking the other way, a continuation in the prevailing bearish action would have us put a short trade towards 234.41, our temporary support target for now. Only if this level is broken to the downside, we can expect price to test the in-term support line.
If price breaks below the in-term support, it would have us put a short position towards 233.09 fiat. On this trade, our stop loss would be maintained near 234.64 fiat.