Yet key resistance overhead beginning at $8,000
Last Thursday’s signals were not triggered, as there was no bearish price action when the resistance level identified at $7,200 was reached.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades may only be entered prior to 5pm Tokyo time Tuesday.
Long Trade Idea
- Long entry after a bullish price action reversal on the H1 time frame following the next touch of $7,200.
- Place the stop loss $50 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
- Short entry after a bearish price action reversal on the H1 time frame following the next touch of $8,004, $8,162, or $8,375.
- Place the stop loss $50 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 Thursday that we seemed to be getting an emerging consolidation pattern with neither bulls nor bears having the upper hand. I thought the best approach would be scalping rejections from either of the nearby levels with no directional bias or waiting for a breakout from this range and going in the direction of the breakout.
I was only correct about the breakout, which was strong and bullish. The price chart below shows that the price has now become established within a symmetrical bullish price channel, which is a bullish sign. It looks like the price will rise further over the short-term, but bulls may find it difficult to push the price above the $8,000 area which sees the start of a cluster of three key resistance levels.
The resistance level at $8,004 looks especially strong as it is confluent with both a major round number at $8,000 and the upper trend line of the price channel.
I would be prepared to take a cautious short trade from $8,000 but until that level is hit I expect the price is most likely to rise over the coming day.
There is nothing of high importance due today concerning the USD.