Bitcoin: Consolidating triangle
Yesterday’s signals were not triggered, as neither of the key levels were ever reached.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm Tokyo time Wednesday.
Long Trade Idea
Go long at a bullish price action reversal on the H1 time frame following the next touch of $9,073.
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 $10,562 $10,921, or $11,112.
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 as the price was contained within a dubious consolidating triangle, and as the resistance at $10,562 was holding very firm, I saw bulls and bears as evenly matched, so I wanted to stand aside from trading Bitcoin yesterday. This was a good call as the price did little, with neither the bulls nor the bears managing to get any more advantage or success in pushing the price in a desired direction.
I now see the triangle as having more significance as it continues to hold, and also reach a much narrower point which will soon require a breakout. It is theoretically possible to draw more horizontal support and resistance levels near the current price, but probably pointless.
Overall, the signs are pointing to a breakdown of this triangle, so I see the opportunity today as a potential short trade once we get a sustained break below the psychological level at $10,000 which is confluent with the bottom border of the triangle, as can be seen in the price chart below.
Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.