Bitcoin: Bearish wedge supported by $11,112
Last Thursday’s signals were not triggered, as none of the key levels were reached that day.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades may only be entered between 8am London time Monday 5pm Tokyo time Tuesday.
Long Trade Ideas
Long entry at a bullish price action reversal on the H1 time frame following the next touch of $11,112 or $11,000 or $10,890.
Put the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is $50 in profit by price.
Remove 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to run.
Short Trade Ideas
Short entry after a bearish price action reversal on the H1 time frame following the next touch of $12,804 or $13,176.
Put the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is $50 in profit by price.
Remove 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to run.
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 last Thursday that the price was now consolidating within a symmetrical triangle formation, centred a little below $12,000. I wanted stand aside for the time being and would not pay much attention to a breakout from the triangle. I saw the key thing to watch for as a bearish retracement to support at $11,112 and to watch carefully how the price reacted there: if it was a solid bullish bounce, I would take a bullish bias as the price has a lot of room to rise, all the way to $12,804.
This was a good call as the collapse of the triangle meant little. The bounce at $11,112 was much more significant. We now have a bearish wedge chart pattern formation but it seems to be well supported at $11,112 with room to rise quite a long way before the price would hit any key resistance levels.
I see the major opportunity here as another bullish bounce at $11,112 which would be an attractive long entry opportunity as there is such a strong cluster of support levels at and below that price – I would take a bullish bias on Bitcoin if we get this setup later.
There is nothing of high importance due today concerning the USD.