Day traders considering a wager on Bitcoin in the short term need to be aware that price velocity in BTC/USD the past week has taken on a rather volatile exhibition. Speculators looking to pursue the digital asset with wagers on either direction should have their risk management firmly in place including entry, stop loss and take profit orders.
A look at a one-week technical chart of BTC/USD expresses the speed and abrupt changes of direction that have been seen. Although the price action of the world’s most famous digital asset has been sideways the past two days, traders should be suspicious of the trajectory and be ready for more abrupt movements.
Traders who are listening to Bitcoin influencers should use their own judgment regarding the future direction of BTC/USD. Speculators should also consider the important aspect that influencers who are preaching that Bitcoin will continue to gain over the long term are not talking about the short-term whipsaw movements in BTC/USD, which can be violent and painful if the wrong direction is bet on and too much leverage has been used by day traders.
Rapid Highs Early this Week followed by a decline in BTC/USD
The ability of BTC/USD to exceed the 28,000.00 level on Sunday with sudden speed and then climb to nearly 28,625.00 on Monday got plenty of attention and fanfare from Bitcoin backers. However, since then BTC/USD has declined, and at the time of this writing is near the 27,630.00 ratio. Yes, the current price of BTC/USD is within the upper boundaries of its one-month technical chart, but an important support level below lurks of 27,300.00.
Support and Resistance Levels are Worthy Points of Interest
- If BTC/USD can sustain its current price above 27,500.00, this could be a sign some stability has been achieved in the digital asset and another run higher could take place in the near term.
- Yesterday’s low for BTC/USD was around 27,200.00, if the 27,300.00 support level proves vulnerable today a retest of the 27,200.00 could be dangerous and open the door for another burst lower which could certainly target the 27,000.00 ratio.
- As always BTC/USD traders should be ready for the changes in value which suddenly emerge. The higher move in Bitcoin over the past week is intriguing, but it doesn’t guarantee that BTC/USD is going to burst another couple of thousand dollars higher and find itself near 30,000.00.
Bitcoin Short-Term Outlook:
Current Resistance: 27,800.00
Current Support: 27,300.00
High Target: 28,400.00
Low Target: 26,750.00
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