Bitcoin: More bearish but $7,750 support
Yesterday’s signals were not triggered, as there was no bullish price action at $8,048
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm Tokyo time Friday.
Long Trade Idea
- Go long after a bullish price action reversal on the H1 time frame following the next touch of $7,754.
- Put 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 $8,095, $8,247, or $8,458.
- Put 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 it looked as if the price would continue downwards and reach the next support level just above $8,000. This was a good call as it did, and it even got lower than that.
We have a weak long-term bearish trend. The price is behaving very technically, and respecting key levels and the obvious bearish trend line shown in the price chart below.
If the price keeps falling and reaches the $7,750 area, this could be a long-term buying opportunity, as it is a key recent inflective low, should we see a bullish double bottom form here.
Alternatively, if the price breaks lower than $7,750, we could see a strong fall to much lower levels.
I would wait until the $7,750 level is reached before deciding whether to get involved here, but additionally I would be prepared to take a short-term short trade from a bearish rejection of $8,095 especially if that is confluent with a rejection of the trend line.
Regarding the USD, there will be a release of Philly Fed Manufacturing Index data at 1:30pm London time and Crude Oil Inventories at 4pm.