Bitcoin: More bearish below $7,000
Last Thursday’s signals were not triggered, as none of the key levels were reached that day.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may be taken before 5pm Tokyo time Monday.
Long Trade Ideas
Long entry after a bullish price action reversal on the H1 time frame following the next touch of $6,786 or $6,441.
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 $7,221, $7,269, $7,400 or $7,445.
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 picture had become more bearish as the price had continued to move down slowly and seemed to be breaking below the key support level at $7,131. I was ready to take a cautious bearish bias if the price traded below $7,000 but it never did. This was a good call as the price actually moved up somewhat and the action above has redrawn key resistance levels.
The price is now again looking low and threatening to break down to new lows so I take the same approach here as we have a bearish trend on all time frames – I will take a bearish bias below $7,000 to at least as far as the next key support level at $6,786.
Concerning the USD, there will be a release of Flash Manufacturing PMI data at 2:45pm London time.