BTC/USD: Strong fall over recent days
Last Thursday’s signals were not triggered, as there was insufficiently bullish price action when the support level identified at $10,696 was first reached.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades may only be entered before 5 pm Tokyo time Tuesday.
Long Trade Ideas
- Long entry after a bullish price action reversal on the H1 time frame following the next touch of $9,731, $9,655, or $9,462.
- 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 $10,351 or $10,790.
- 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 last Thursday that the price had plenty of room to fall and was showing every sign that it would fall further soon.
I said that if we got two consecutive hourly closes below $11,200, I would take a bearish bias until $10,696 is reached.
We did and it was reached, very quickly, so this was an accurate, effective, and profitable call.
We saw the bearish momentum carry price below the key support level which I had seen at $10,696.
However, over recent days we have seen the downwards movement flatten out and bottom at about $10,000 which is a major psychological round number, so it is not surprising that some support is found here as many long-term investors see $10,000 as a relatively cheap buying opportunity.
I think that the price may not quite be ready to rise yet, but it is also not likely to fall much further. Therefore, continuing consolidation in this area seems to be the likely short-term outcome here.
I would only be prepared to take a long trade today, from a bullish bounce at any of the key support levels shown below $10,000.
There is nothing of high importance due today concerning the USD, as it is a public holiday today in the U.S.A.