BTC/USD: Support level at $8,375 looks very strong
Last Thursday’s signals were not triggered, as there was no suitable price action to trigger a trade entry at any of the key levels which were reached that day.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be taken 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 $8,375 or $8,162.
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 $8,748, $8,992, or $9,151.
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 last Thursday that I thought the price was likely to mostly hold up, it is just a question of which of the new support levels ends up being the one the provides the key support to prevent a further fall. I was prepared to take a long trade from any bullish bounce at any of the support levels.
This was enough to keep out of trouble but was neither correct nor useful.
The price in fact began a period of consolidation with a new bearish trend line connecting the recent swing highs forming as an obvious chart feature, and this is shown within the price chart below. The only support level which held up over this period, and which looks very strong and relatively reliable, is at $8,375. We also have an old broken trend line which is still valid that has now come up closer to the price and it forms the lower boundary of a consolidating triangle, which adds weight to the case that we see a medium-term consolidation pattern here.
I would be very happy to take a long trade from a bullish bounce at $8,375 or a short trade from a bearish rejection of $8,992 or even $9,150, as these areas are roughly confluent with the trend lines making up the consolidating triangle, which I think is likely to hold today.
There is nothing of high importance due today concerning the USD.