Bitcoin: Bullish above $8,800
Yesterday’s signals were not triggered as there was insufficiently bearish price action at either of the resistance levels which were reached.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 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 $8,966, $8,802, $8,683, or $8,504.
- 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 $9,233 or $9,489.
- 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 the picture had become more bullish as the price had risen quite firmly after bouncing from the support level I had identified at $8,216. However, I suspected that the bullishness would run out of steam and the price would now range between the nearest support and resistance levels.
I was wrong about the ranging and I would have done better to have more confidence in the bullish move, which is unusual for Bitcoin within a generally risk-off market environment. It shows unusual strength and that is a bullish sign for Bitcoin.
The price is now resting on new support at $8,966 after making a double top near $9,200 followed by a normal bearish retracement. As long as this level holds, the outlook is bullish. I would even say its still quite bullish above $8,802 and I would be happy to take a bullish bias if we get a healthy bounce following a retracement to that level.
Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm London time.