Yesterday’s signals may have produced a short trade from the semi-doji candlestick on the hourly chart which rejected the resistance level at $3,876 during yesterday’s New York session. The action is very slow but still looks slightly bearish so there is probably not a strong reason to exit the trade yet.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm Tokyo time Thursday.
Long Trades
Go long at a bullish price action reversal on the H1 time frame following the next touch of $3,804 or $3,552.
Place the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is $50 in profit by price.
Take off 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to ride.
Short Trades
Go short after a bearish price action reversal on the H1 time frame following the next touch of $3,876 or $3,969.
Place the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is $50 in profit by price.
Take off 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to ride.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
BTC/USD Analysis
I wrote yesterday that bulls and bears now seemed to be evenly balanced despite the move up from $3,800, with the price currently just below two resistance levels. I ignored $3,858 but thought that $3,875 could be more interesting although I only wanted to take a directional bias after breaks, not reversals.
This was mostly a good call as the price did make a bearish turn at $3,856 from where it is currently moving down to new short-term lows. I still think that the best approach is to be bullish when the price has got above $3,875 for a while or bearish once $3,804 breaks down convincingly and I also think that there is more potential on the downside than the upside.
Regarding the USD, there will be releases of Core Durable Goods Orders and PPI data at 12:30pm London time.