Bitcoin is once again grabbing headlines all over the world as Dorian Satoshi Nakamoto, the man who Newsweek apparently incorrectly reported as the creator of bitcoin back in March, releases a video thanking his supporters for donations that have so far amounted to $23,000.
Despite the media attention however, the actual value of bitcoin remains stable. It looks as though once again, technical levels will be the ones to watch as far as intraday targets go. Here’s what you need to know.
First, lets do a quick recap of recent action. The BTCUSD was extremely volatile towards the end of last week, as reports out of China first lent credence to a supposed asset freeze, but were later dismissed. During the first half of the current week, the pair has remained remarkably stable, carving out weekly highs and lows within a relatively tight $40 range.
During Tuesday market hours, and throughout Wednesday morning, the pair has formed something of a falling wedge, which now offers up the levels to watch. A falling wedge is typically a reversal pattern, one that suggests downside momentum is weakening and there may soon be some upside strength in its representative pair. A break of the upper channel over the past couple of hours has completed the pattern, and offers up a bullish intraday technical bias.
Expect a retest of the channel to act as support, and validate an initial upside target of in term resistance at 485.316. A break, and close, above this resistance would offer up a secondary upside target of seven day highs at 504.966.
If the channel fails to hold as support, the BTCUSD may well break back into its falling wedge range as the day matures. In this instance, look for an initial downside target of the pattern’s lower channel at 469.491.
As ever, use the pattern’s parameters to set your risk management. A stop loss below channel support on a long entry will ensure a timely exit in the event of a trade moving against you.
To contact the reporter of this story: Samuel Rae at Samuel@forexminute.com