Bitcoin: Bullish but resistance at $8k pivotal
Yesterday’s signals were not triggered, as there was insufficiently bearish price action at $8,002.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades have to be taken before 5pm Tokyo time Wednesday.
Long Trade Ideas
- Long entry after a bullish price action reversal on the H1 time frame following the next touch of $7,698 or $7,477.
- 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 $8,002, $8,154, or $8,375.
- 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 yesterday that either short or long trades from rejections of key levels were likely to work out OK, but the bulls had a small edge so longs from bounces at support would probably be better. I also noted the resistance at $8,000. This was a great call as the price rose to peak at about $8,000.
Bulls should be encouraged by the buying we are seeing, but as I said yesterday, the resistance at $8,002 looks like it will be very pivotal. It may be too early to short so the best approach will probably be to take a bullish bias but only if the price can get established above the current nearest resistance level at $8,002 with a couple of consecutive hourly closes above that level. Alternatively, the support level at $7,477 looks very strong, so a long at a bullish bounce from there could also be a great trade.
Concerning the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time.