Monday June 20, 2016 5:30 PM
Bitcoin has fallen about $80 in the last 24 hours or so — currently trading at about $680.
If we don’t reverse and keep falling below $635, the patterns I follow show a moderate probability intermediate term target of $385-425. However, there is a higher probability pattern that BTC could reverse during the next 24 hours and close above yesterday’s low of $720.
If this reversal happens there is a strong probability of more upside for BTC — even new highs above $800. This could also raise the intermediate term downside targets.
I currently own no BTC but if I were going to buy I would be very conservative because BTC indicators are so overbought and there is a large potential for downside here. I’d be looking at around $635 as an entry. I would exit the trade if we don’t get back above $720 by end of trading day tomorrow. There’s a good chance BTC will reverse well before it hits $635 but I would just be guessing rather than looking for an edge via patterns and indicators at that point and don’t want to trade that way.
In any case a safer trade would be to enter tomorrow if we get the reversal with a stop at todays low.
I’ll update what the patterns suggest tomorrow once today’s key data is complete, but I wanted to note the fairly high probability of a reversal here.
One final note — a reversal here also starts a pattern that can help determine a good entry for an intermediate term BTC short in the near future.
Things are getting interesting in BTC.