BTC/USD: Bullish break above bearish trend line
Last Thursday’s signals produced a profitable long trade from the bullish bounce at $8,216.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm Tokyo time Tuesday.
Long Trade Ideas
Long entry after a bullish price action reversal on the H1 time frame following the next touch of $8,504, $8,461, $8,375, or $8,216.
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 $8,766 or $9,011.
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 last Thursday that two consecutive hourly closes below $8,461 would be a bearish sign, and I would take a bearish bias here on this pair for the day if we had gotten those closes.
This was a good call as the price fell by about another $250 over the next 24 hours after we had gotten those two closes.
The picture is more bullish now as the price has risen quite firmly after bouncing from the support level I had identified at $8,216. However, I suspect that the bullishness will run out of steam and the price will now range between the nearest support and resistance levels shown within the price chart below. Therefore, I would be equally prepared to take either a long or short trade from a reversal at either level.
There is nothing of high importance due today concerning the USD.