Regardless of what I think about the underlying instrument, bitcoin became “official” over the weekend as its futures are now being traded on a regulated exchange.
Because of that, and given widespread interest, it deserves our attention — at least periodically.
This will be the first in a series of trading reports specific to bitcoin BTCUSD, -1.52% (There’s also a futures contact XBTF8, -2.51% ). The intention is to provide trading strategies, not investment strategies, for bitcoin.
Read: Bitcoin futures: Here’s what you need to know
Based on current technical observations, there are no immediate resistance levels. However, converted support exists at $16,234. So long as the cryptocurrency remains above that level, additional increases are likely. And they could be aggressive because there are no immediate resistance levels in the charts.
Please review the chart, below, and additional commentary below that.
Importantly, $16,234 acts as a downside confirmation indicator at this time. If that level breaks lower, we would expect prices to decline to $15,425. And if that level breaks too, we would expect a much more serious drop, to $13,281.
So far, converted support is holding, and bullish undertones exist. And that will continue unless bitcoin breaks below $16,234 or until new trading channels develop.
Thomas H. Kee Jr. is a former Morgan Stanley broker and founder of Stock Traders Daily. Kee managed the fourth-best-performing strategy in the world in 2016, according to HedgeCo.
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