Bitcoin: Bearish trend with heavy resistance
Yesterday’s signals were not triggered, as none of the key levels were reached yet.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm Tokyo time Wednesday.
Long Trade Ideas
Go long at a bullish price action reversal on the H1 time frame following the next touch of $9,073, $8,893, or $8,610.
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 Trade Ideas
Go short after a bearish price action reversal on the H1 time frame following the next touch of $9,660, $9.924, or $10,204.
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 we had a more bearish picture but there was always the chance of long-term buyers stepping in, and that the support level at $9,073 may be very strong. I also thought that the level at $9,660 was likely to be the first pivotal point which would give us an indication of the major direction of movement over the coming day. This was a pretty good call overall as the level at $9,660 held and although there has not been much movement over the past 24 hours, the direction is slightly down.
There is no question we are getting a more decisively bearish picture here. There is a lot of pressure weighing down on the price: two medium-term bearish trend lines, which can be seen in the price chart below, and four horizontal resistance levels between $9,660 and $10,359. I think any of these could provide a good short trade entry opportunity. Things will get very interesting as both of these bearish trend lines get established below the psychological $10,000 level.
I would take a bearish bias today following a solid reversal following a retracement to any of the resistance levels outlined above.
Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm London time.