Bitcoin Price Watch: Patience is King – The Basics about Cryptocurrency

Sometimes, oftentimes even, trading financial instruments can be very boring. There’s an old saying that goes something like this: more money is made by knowing when to stay out of the markets than when to get in, and throughout all my trading history, I’ve come to believe this statement is key to a profitable trading career. Overtrading is a sure fire way to quickly lose money in the financial markets, especially on the intraday charts – we’ve got to let the markets tell us when to enter, and only enter when certain factors come together to form a signal, with these factors defined as a strategy. It sounds simple on paper, but in practice it really isn’t. Staring at intraday charts when they are going nowhere can become tedious very quickly, and it’s often tempting to jump in on the assumption that price will behave how you expect it to and form a signal after you have already entered, or to disregard a factor altogether and enter in its absence. Most of the time, this sort of action results in losses, but psychologically the temptation is tough to overcome. That’s why you’ll see psychology form a mainstay of the majority of forex, equities, etc. educational resources. Trading cryptocurrencies is no different.

When the price of bitcoin ranges for an extended period of time, and especially if this range is too tight to bring an intrarange approach in to play, it’s not easy to hold back from entering and this has been the case over the past twenty-four hours or so. Price has ranged across between a circa four-dollar range, and despite a few tempting spikes, has failed to materialize into any significant entry signals.

Our strategy is in place to take advantage of sharp movements, however, and these can happen at any time (as we’ve seen over the last few days!) so with this in mind, what are we looking at in today’s bitcoin price, and as we head into the European evening and the Asian session that follows, where are we looking to get in and out of the markets? Take a quick look at the chart to see today’s range.

As the chart shows, the two levels we are looking at today are in term support at 370.41 and in term resistance at 374 flat. This is the four dollar range we discussed a little earlier. As mentioned, it’s too tight to put together any sort of meaningful intrarange trades, so we’ll focus solely on the breakout side of things in today’s analysis.

Looking to the upside first, if the bitcoin price breaks in terms support at 374 flat, we will look to enter long on a close above this level. A stop loss somewhere in the region of 372 gives us plenty of room to target a nice reward, and with today’s coiling action, we expect some sustained momentum if we do get a break. With this in mind, we’ll target 380 flat on the entry.

Looking the other way, a close below 367.15 will put us short towards 360 flat, with a stop around 369 keeping things attractive on the risk management side of the trade.

Charts courtesy of Trading View