Bitcoin: Consolidating between $7,459 and $7,192
Yesterday’s signals produced a profitable long trade from the bullish rejection of $7,192, the remainder of which should probably be closed out now.
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 $7,192 or $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 $7,459 or $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 there was buying at the support level of $7,192. However, the nearest resistance level at $7,459 also looked strong, so I thought a period of consolidation here was likely. This was a good call as both levels held, and the price has moved little.
There is an even match between bulls and bears over the medium-term as well after a prolonged bearish period. This doesn’t mean that the long-term bearish trend is over yet, but it is weakening.
Short trades probably have more potential right now, but a firm rejection of a key level in either direction could be traded. I see the best possible trade as a short entry following a reversal at $7,459. Alternatively, it may be best to not trade this pair today and wait to see what happens to the current consolidation pattern.
Regarding the USD, there is nothing of high importance scheduled for today.