BTC/USD: Wide consolidation below $10,000
Yesterday’s signals may have produced a long trade from the bullish bounce at the support level at $9,156 but the distance of the signal’s entry to its stop would have been extremely wide, making this likely to be a poor trade, so it would probably be wise to exit from such a trade right away.
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 $9,146 or $9,041.
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 $9,600 or $10,131.
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 yesterday that I would be very happy to take a long trade from a bullish bounce following a retracement to $9,476 if that happened before $10,000 is reached.
This was a good call as there was a sharp move down to the support level below that, and the recovery has been limited, so it was enough to keep out of trouble.
The depth of the drop and the new lower resistance at $9,600 have ended the bullish picture.
It now seems clear the technical position is bearish below $9,600 until the support near $9,100 is reached again. This is backed by slightly bearish short-term price action happening now.
Zooming out, we see the price is in a wide consolidation below $10,000 stretching down to about $9,100.
I would be prepared to take either a long trade from a bullish bounce at either support level, or a short trade from a bearish reversal at $9,600 in line with the broader consolidation, without directional bias.
Regarding the USD, there will be a release of Flash Manufacturing PMI at 2:45pm London time followed by the Chair of the Federal Reserve giving a minor speech at 7:30pm.