Bitcoin: More bearish below $7,131
Yesterday’s signals were not triggered, as the price action when $7,131 was first reached was insufficiently bullish.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be entered prior to 5pm Tokyo time Friday.
Long Trade Ideas
Go long after a bullish price action reversal on the H1 time frame following the next touch of $6,786 or $6,441.
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 $7,269, $7,445, $7,698 or $7,824.
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 the best opportunity which might arise would be a long trade from a bullish bounce at $7,131. I would take a bullish bias if that had set up yesterday.
We did see a bounce from that level yesterday, but it was not strong enough to produce a follow-through to give a long trade entry as the bullish move quickly stalled. So, my forecast was at least good enough to keep out of trouble.
The picture now is more bearish as the price has continued to move down slowly and now seems to be breaking below the key support level at $7,131. I will take a cautious bearish bias if the price trades below $7,000 later today but only until the next support level at $6,786.
There is nothing of high importance due today concerning the USD.