Bitcoin: Double bearish price channels push price down
Yesterday’s signals were not triggered, as none of the key support and resistance levels identified were reached.
BTC/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm Tokyo time Thursday.
Long Trade Ideas
⦁ Long entry after a bullish price action reversal on the H1 time frame following the next touch of $7,754 or $7,202.
⦁ 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 $8,154, $8,375 or $8,703.
⦁ 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 the technical picture was bearish, but I would want to see a retracement to a key resistance level before taking another short trade. I thought the price might at least sit on the resistance level near $8,150 for a while. However, the bearish momentum continued in line with the double bearish price channel structure which can still be seen within the price chart below.
The price movement has created a new lower “stairstep” resistance level at $8,154. This could again provide a great short trade entry opportunity.
One note of caution for bears: the nearest support level shown in the chart at $7,754 could become a very interesting entry point for long-term buyers, due to its confluence with the lower channel trend line and the psychological quarter-level at $7,750.
A sustained break below $7,754 would be a very bearish sign.
Regarding the USD, there will be a release of FOMC Meeting Minutes at 7pm London time.