BTC/USD: Break below $11,400 was technically significant
Yesterday’s signals produced a short trade entry from the bearish price action which rejected the resistance level identified at $11,518.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be taken before 5 pm Tokyo time Friday.
Long Trade Ideas
- Go long after a bullish price action reversal on the H1 time frame following the next touch of $10,696.
- Put 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
- Go short after a bearish price action reversal on the H1 time frame following the next touch of $11,518, $11,657, or $11,924.
- Put 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 there was not only short-term bearish momentum, we also had room to move down with no more support levels below the current price above $10,696.
I thought that the price looked likely to fall further and in fact, the direction here seemed to be more assured than it did in any major Forex currency pair.
I was looking to take a short trade from a bearish reversal which might set up at the closest resistance level sitting at $11,518.
This was a good call as that level held and produced a bearish reversal. The short trade is currently more or less at break-even, but the action is still bearish, and the price looks more likely to fall from here than to rise, so I am happy with my call yesterday.
The technical picture looks more decisively bearish as it is now possible to draw a symmetrical bearish price channel (which is shown in the price chart below) which has lasted for about ten days.
I take a bearish bias on Bitcoin today.
Concerning the USD, the Chair of the Federal Reserve will be giving a minor speech at 2:10pm London time, as the Jackson Hole Symposium gets underway.