BTC/USD: $10k area may be supportive
Yesterday’s signals were not triggered, as the bearish price action took place slightly above the resistance level which I had identified at $10,542.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades may be taken prior to 5 pm Tokyo time Thursday.
Long Trade Ideas
- Long entry after a bullish price action reversal on the H1 time frame following the next touch of $9,731 or $9,655.
- Place 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.
- Remove 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
- Short entry after a bearish price action reversal on the H1 time frame following the next touch of $10,557, $10,620, or $11,460.
- Place 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.
- Remove 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 there were no key support levels close by, and the technical picture looked more bearish than bullish. However, as the price was approaching the big psychological round number at $10,000 which has proven to be very supportive in the recent past, I thought that the price may struggle to fall much further.
This was a good call as it accurately reflected what happened over the past 24 hours. The only change to the price chart’s technical analysis is to adjust the nearest resistance level slightly.
The price is failing to break up above resistance but seems unwilling to fall any further to the area below $10,350.
Risk sentiment has improved a little as we see the U.S. stock market indices move up somewhat, which may be preventing the price from falling or at least be one factor there. The U.S. data and testimony from the Chair of the Federal Reserve may reinforce or change that picture later.
The situation is a little less bearish than it was yesterday, but the price may well still fall. I see a long-term buy at $10,000 (or at either of the support levels shown below that) as remaining interesting. How the price reacts if and when it reaches $10,000 should tell us something.
Concerning the USD, there will be a release of Flash Manufacturing & Services PMI at 2:45 pm London time, followed 15 minutes later by testimony from the Chair of the Federal Reserve before Congress.