Bitcoin: Recovery from 6-month low prices
Yesterday’s signals were not triggered, as there was no bearish price action at any of the resistance levels which were reached.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm Tokyo time Wednesday.
Long Trade Ideas
⦁ Go long after a bullish price action reversal on the H1 time frame following the next touch of $6,954 or $6,786.
⦁ Place 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
⦁ Go short after a bearish price action reversal on the H1 time frame following the next touch of $7,404 or $7,730.
⦁ Place 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 yesterday that Bitcoin had now reached new 6-month low prices and was showing a few bearish signs. However, I also noted the danger of long-term buyers stepping in at these prices. Anyway, there were no bearish reversals at any of the resistance levels which were hit when the price started to recover strongly, so as my bias was only at those levels, it was a good enough call to stay out of trouble.
We now have a somewhat less bearish situation, although the old price channel trend lines are still untouched, and it seems clear that the area at about $7,400 is still acting as strong resistance. I think $7,404 has a good chance of being today’s pivotal point so I would be prepared to take a short trade / short bias if we get a bearish reversal at that level later today.
The support at $7,122 continues to hold and that is a somewhat bullish sign, but the level is too “used” – I would consider taking a long trade at a bullish bounce off $6,954 if that happens before $7,404 is hit.
We are still in a strong, long-term bearish trend.
Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.