BTC/USD: More bearish below $10k
Last Thursday’s signals produced a short trade from a bearish rejection of the resistance level identified at $10,440 – the entry candlestick was large so reward to risk is relatively small but positive as this trade sits in floating profit now. It may be wise to exit this trade as the price action looks relatively congested.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 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 $10,018, $9,651 or $9,522.
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 bullish price action reversal on the H1 time frame following the next touch of $10,440, $10,921, or $11,112.
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 I still saw long trades from bounces at support levels as the best opportunities to watch out for, especially at $10k, but the technical picture was a little more bearish. I thought that if the price got established below $10k that would make the picture considerably more bearish and suggest that the bullish trend would be in danger.
I was right to worry about the price getting back below $10k as this is how things have turned out.
This could be an early sign that the bullish move we have seen so far during 2020 has run its immediate course and we could be in for a period of consolidation with sideways price movement.
Bulls and bears seem evenly matched but there is still good reason to be interested in long trades from any bullish bounces at support levels.
If the price can remain below $10k for a while that will be a bearish sign.
I take no directional bias today.
There is nothing of high importance due today regarding the USD. It is a public holiday today in the U.S.A.