ForexMinute.com — After enjoying one of it strongest rallies this year, the price of Bitcoin changed moods as it dropped heavily amid a massive sell-off.
According to the 4H BitFinex chart (see below), Bitcoin has successfully breached the $500-mark yesterday — its year’s best. However, the selling pressure near the high somewhat influenced a pullback which kept extending due to additional fundamental factors such as Silk Road Bitcoin Auction and the very recent server attack on OKCoin, one of the world’s leading Bitcoin exchanges by trade volume.
As a result, the price has plummeted towards a new range, where 354.81 fiat is serving as the new in-term support and 384.12 fiat as new in-term resistance level. The recent drop meanwhile has put our focus on both intraday breakout and intra-range trading strategy.
We will first be waiting for Bitcoin to extend its downside momentum. Therefore, a break below the in-term support will clearly validate 328.98 as our primary downside target. On this trade, our stop loss will be somewhere near 360.08 fiat. We would further look towards extending our short position if price breaks further below 360.08. In that case, our secondary target would be 313.66 fiat.
Looking the other way, if the price is able to hold its downside attraction near in-term support line, then we will look to enter a quick long position towards our current resistance near 384.12 fiat. If the bounce back shows any signs of extension, we will enter a similar long position towards 405.16 as our immediate upside target. On this trade, our stop loss would be maintained near 377.58 fiat.