BTC/USD: Early signs of stability
Yesterday’s signals were not triggered, as none of the key levels were reached before 5pm Tokyo time.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades may only be entered before 5pm Tokyo time Friday.
Long Trade Ideas
Long entry after a bullish price action reversal on the H1 time frame following the next touch of $4,903, $4,116, $3,807 or $3,000.
Put the stop loss $50 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 Idea
Short entry after a bearish price action reversal on the H1 time frame following the next touch of $5,937.
Put the stop loss $50 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 thought it is crazy to buy Bitcoin in this panic environment. Risk sentiment surely has further to fall, so I thought we were extremely likely to see lower prices in the coming days and weeks, so I continued to look for short trades from bearish bounces at any resistance levels.
This was enough to keep out of trouble but surprisingly the price has stabilized and even seems to be increasing as the panic selling seems to have at least paused for now, possibly helped by the huge stimulus packages announced by the European Central Bank and the U.S. Treasury (although the latter is ongoing).
We may see a short-term rise in price, but I think risky assets such as Bitcoin are going to go lower still over the coming days and weeks, so I am happy to take a bearish bias if we get a bearish price action reversal at any key resistance levels identified above.
There is nothing of high importance scheduled today concerning the USD.