Bitcoin: Bullish above $7,477
Last Tuesday’s signals produced a profitable short trade from the bearish rejection of the resistance level at $7,260 by an hourly pin candlestick.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be entered prior to 5pm Tokyo time Tuesday.
Long Trade Ideas
Go long after a bullish price action reversal on the H1 time frame following the next touch of $7,477, $7,228, or $7,043.
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 $7,698, $7,824, or $8,002.
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 last Tuesday that I would take a bearish bias today if we get two consecutive hourly closes below $7,000 and the price then breaks to a new low for the day, at least as far as $6,441.
This never happened but using $7,000 as a pivotal point was enough to avoid taking a losing short trade into the bullish reversal.
The technical picture is more bullish now as we have had a stronger bullish impulsive move that has pushed the price back up above $7,500. However, the price really needs to get established above $8,000 before I will be confident that we are probably seeing a serious trend change.
Either short or long trades from rejections of key levels are likely to work out OK but right now the bulls do have a small edge so longs from bounces at support will probably be better. It will probably be wise to take profits relatively conservatively.
There is nothing of high importance due today regarding the USD.