Bitcoin: Bearish trend line, but higher lows show mixed picture
Yesterday’s signals were not triggered, as there was insufficiently bearish price action at any of the resistance levels which were reached.
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 $7,131, $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 $7,192, $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 following the break below the lower level of the consolidation zone at $7,192 the picture had become more bearish, and I was ready to take a bearish bias at any of the nearby resistance levels following a bearish reversal.
I was wrong as the price actually moved up over the day yesterday, giving a much more mixed and uncertain technical picture.
The long-term bearish trend line can be redrawn with an adjustment, and this is the dominant technical feature. It is a bearish feature.
However, bulls have been producing higher swing lows over recent days, and the key support level at $7,131 continues to hold.
Action is a little messy, but I think if the price can get established above the descending trend line, it would be a significantly bullish sign. Despite that, there are a lot of key resistance levels up there which could act to hold the price down.
I have no directional bias, I think we will see spikes and reversals to key levels, so trading reversals in either direction is likely to be the best approach here.
Regarding the USD, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time, followed by ISM Non-Manufacturing PMI data at 3pm.