Bitcoin: More bullish but weekly resistance below $8,000
Last Thursday’s signals were not triggered, as there was insufficiently bearish price action when $7,221 was reached.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be taken 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 $7,456 or $7,220.
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 $7,698, $7,824, or $8,002.
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 size of this bullish thrust put the long-term bearish trend in doubt, and we may have seen some significant long-term buying from the low.
I thought that much would now depend whether the price can get established above the current resistance level at $7,269 which would be a bullish sign if it happened.
This was a good call as once the price finally managed to break above that price, it continued to rise and go on to look more bullish, so the bulls certainly have the upper hand.
However, a problem for bulls is likely to be the fact that we are now seeing the price get back to this cluster of resistance levels at and below $8,000 which has been very resistant for the past few weeks, so a major bearish reversal in this area would not surprise me.
For these reasons, I would be prepared to trade reversals at nearby key levels both long and short. The support at $7,221 and the resistance at $8,002 look like especially attractive levels.
I expect the price will continue to rise but probably turn bearish below $8,002 soon as the most likely price scenario.
There is nothing of high importance due today concerning the USD.