Bitcoin: Bullish breakout beyond long-term trend line
Last Thursday’s signals were not triggered, as none of the key levels identified were reached that day.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm Tokyo time Tuesday.
Long Trade Ideas
Long entry after a bullish price action reversal on the H1 time frame following the next touch of $8,893, $8,458, or $8,102.
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
Short entry after a bearish price action reversal on the H1 time frame following the next touch of $10,440.
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 last Thursday that the technical picture is now much more bearish, and the edge would probably be on the short side now. I was looking to take a bearish bias if we had gotten a pull-back to the resistance level at $7,753 followed by a firm bearish price action reversal.
This was justified over Thursday, but we have now seen a completely opposite scenario play out. I was watching earlier in the week for long-term buying to happen below $7,750 and it finally did on Friday, with the price rising by more than 33% in just a few hours. Even for Bitcoin, this was a dramatic move.
This rise has continued to hold up above the $9,000 level but could not hold up yet above $10,000. Technically, the break above the long-term descending trend line which is shown within the price chart below is very significant, as this trend line has formed and held over the course of many months.
We now have a much more bullish picture, and the support at $8,893 is likely to be strong as it is now very confluent with the broken trend line, which may now act as support.
I will therefore take a bullish bias today if we get a solid bounce following a retracement to the $8,893 level especially if the trend line is also touched within the same rejection.
There is nothing of high importance due today concerning the USD.