Bitcoin: Pivotal point at $7,221
Yesterday’s signals produced a profitable long trade from the bullish bounce at $7,456.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be entered before 5pm London time Tuesday.
Long Trade Ideas
Go long after a bullish price action reversal on the H1 time frame following the next touch of $7,221 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 $7,456 or $7,698.
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 despite the more bullish picture caused by the strong engulfing rise in the price, a major bearish reversal in this area below $8,000 would not surprise me.
I expected that the price would continue to rise but probably turn bearish below $8,002 soon as the most likely price scenario.
This was a good call as we got an important bearish turn just below the resistance level which I identified at $7,698. The price is continuing to fall and is near the support level at $7,221 which looks very pivotal.
It is very likely that how the price reacts at $7,221 will determine its course for the rest of the day. So, I would take a weakly bearish bias if we get a couple of hours of consecutive closing prices later below that level.
There is nothing of high importance due today concerning the USD.