Yesterday’s signals were not triggered, as there was no bearish price action when either of the identified resistance levels were first reached.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades may only be taken before 5pm Tokyo time Friday.
Long Trade Ideas
Go long after a bullish price action reversal on the H1 time frame following the next touch of $20,910, $20,000, or $19,977.
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.
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
Go short after a bearish price action reversal on the H1 time frame following the next touch of $22,500 or $25,000.
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.
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 after the price had continued to consolidate bullishly for another day, the technical picture had become a little bit more bullish. Despite that, I wanted to wait for a daily close above $20,000 to go long, but short-term traders might look to get long at any bullish bounce at a key support level. I was not ready to take any short trade in Bitcoin.
This was basically a good call, although the price never retraced to any key support levels – I was correct to look to the long side. Waiting for the New York close yesterday above $20,000 would have put you in a trade in considerable floating profit just before today’s London opening time.
We have seen a very strong bullish breakout to new record all-time highs in Bitcoin way beyond the big psychological level at $20,000. The price is trading well into “blue sky” and could go much higher very quickly, although the obvious round half and quarter levels at $22,500 and $25,000 may prompt some profit taking.
The price has risen by approximately 10% over the past two days, so a retracement or consolidation would not be a surprise. As long as stops are kept wide respecting the high volatility of Bitcoin, it could still be possible to enter long and sit tight. When record highs begin to be reached in the last calendar month of the year, the trend often continues right until the last days of the month and we still have two weeks of December left.
An alternative for bulls could be to wait until there is a retracement to the new support at $20,910, or even just any reasonably deep retracement above that, which then makes a turn with bullish price action.
I will not take a short trade today in Bitcoin unless we get a fast rise to $25,000 and a dramatic reversal there.
Concerning the USD, there will be a release of unemployment claims data at 1:30pm London time.