Against the U.S. dollar, valuations in Bitcoin (BTC/USD) are developing in ways which suggest a positive potential for range trading strategies. Somewhat counterintuitively, Bitcoin has actually been one of the market’s most stable assets over the last several weeks. Stock markets have been met with major selling pressure and emerging market assets have experienced turmoil during this period. But price behavior in BTC has managed to hold up in an incredibly resilient fashion, and this brightens the outlook for those bullish on the space as we head into the final weeks of this year.
This creates an outlook in which bullish trades have the potential to generate gains. That said, it is important that crypto traders remember to maintain a stop loss when trading in these instruments. From the longer-term perspective, BTC/USD is trading just above critical support levels. These levels are significant enough that, if tripped, they could force a mass exodus and send price levels much lower in a short period of time.
At this stage, there is little reason for concern as range trading conditions have clearly developed for these instruments. Under these conditions, the conventional wisdom tells us that we buy as prices approach the bottom-end of a trading range. In Bitcoin, this implies a buy zone which falls near the 6,359.60 level. Stop losses can be placed under the prior lows from October 31st at 6,252.10. Crypto traders should consider taking partial profits on an approach toward the 6,615.00 resistance level from November 7th. Once this occurs, traders can move to stop losses to the breakeven point for the remainder of the position.