Forex Minute Trade Plan – Bitcoin 22/04/2014

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Forex Minute Trade Plan - Bitcoin 22/04/2014

Forex Minute Trade Plan - Bitcoin 22/04/2014

As the markets reopen on Tuesday following the Easter break, bitcoin seems to have found some sense of normality against the backdrop of its wild volatility over the past few weeks. How long the current period of stability will last remains to be seen, but for now, it offers up an opportunity to profit from the relatively uniform price action.

Take a look at the BTCUSD chart above. Having traded within a range of support at 476.085 and resistance at 485.316 over the weekend, the BTCUSD has formed something of a descending triangle over the past two days. A descending triangle generally hints at weakening bullish momentum. However, when price action has been relatively stable as has been the case throughout the week so far,  a break of either the downward sloping trendline or the horizontal support can offer up a technical bias. In the event of a trendline break, look for some upside strength in the value of bitcoin versus the USD. A close above current resistance would offer up an initial upside target of weekly highs at 504.966. Beyond that, the pair has a pretty clean run up to April 17 resistance at 534.902.

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Conversely, a break below triangle support at 476.085 would offer up a bearish technical bias and hint at a validation of the pattern’s traditional directive. Look for such a close to present April 19 support at 454.103 as an initial downside target. Beyond that, April 14 support at 442.975 offers up a nice secondary target.

As ever, keep an eye on the fundamentals to guard against any bias reversal. The triangle’s perimeters can act as simple yet effective levels for stop loss placement, serving to manage your risk and get you out of any losing trade if the market goes against you.

To contact the reporter of this story: Samuel Rae at Samuel@forexminute.com