BTC/USD: Yet strong support from $6,685
Yesterday’s signals were not triggered, as there was insufficiently bullish price action when $6,945 was reached.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be taken before 5pm Tokyo time Wednesday.
Long Trade Ideas
Go long after a bullish price action reversal on the H1 time frame following the next touch of $6,685 or $6,576.
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 Ideas
Go short after a bearish price action reversal on the H1 time frame following the next touch of $6,923 or $7,088.
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 would be prepared to take a long trade from a bounce at the support level at $6,945 and I would also be bullish if we get two consecutive hourly closes above $7,300 later today. I would not look for any short trade.”
This was a good enough call to use to at least keep out of trouble, as the price never got back to $7,300. There was a bounce at $6,945 but not enough clearly bullish price action there with the Japanese Candlesticks to justify a long trade entry, which was also just as well.
The market environment and technical picture have also changed, with a more bearish, “risk-off” environment dominant, as stock markets are falling on increased fear following yesterday’s wild crude oil selloff, and the Japanese Yen and U.S. Dollar are clearly the strongest currencies while more risky assets such as Bitcoin suffer.
Technically, we see new lower “stairstep” resistance levels being printed at $6,923 and $7,088 – this is a bearish sign.
I believe that this more bearish environment is likely to persist and strengthen as markets finally begin to get serious about the economic damage which will inevitably be produced by the ongoing coronavirus pandemic. Therefore, I will be very happy to take short trades only today from bearish rejections of either of the nearby resistance levels.
There is nothing of high importance due today concerning the USD.