Last Monday’s signals produced an excellent and very profitable long trade from the bullish bounce at the support level of $30,011 when it was reached late in the Asian session. The level held almost to the pip.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be taken prior to 5pm Tokyo time Thursday.
Long Trade Ideas
Go long after a bullish price action reversal on the H1 time frame following the next touch of $34,512, $32,841, or $30,011.
Place the stop loss $100 below the local swing low.
Move the stop loss to break even once the trade is $100 in profit by price.
Take off 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to run.
Short Trade Idea
Go short after a bearish price action reversal on the H1 time frame following the next touch of $40,000.
Place the stop loss $100 above the local swing high.
Move the stop loss to break even once the trade is $100 in profit by price.
Take off 50% of the position as profit when the trade is $100 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 last Monday that we had a strong bullish trend here which was rapidly becoming a speculative bubble.
I thought that the advance was likely to increase over the short term, so there were still long trades to be entered. However, it was increasingly probable that we would see a blow-off top – an exhaustion of the bulls – which would result in a dramatic climax to a new high followed by a fall of something like 15% or 20% of the value of Bitcoin, which could happen very quickly. I was happy to enter a new long trade if the $30k area held as support and produced a bullish bounce.
This was a very good call as Bitcoin did decline sharply that day, but the support level confluent with $30,000 held up and produced an excellent long trade entry just as I was seeking.
The price has continued to advance bullishly to new highs above the big round number at $35,000. Although volatility remains relatively very high, there are no clear signs of climax and exhaustion, so as we are trading into the blue sky of all-time highs, there is no reason not to take a bullish bias here and look to enter new long trades at pullbacks to the new key support levels nearby which I have identified above.
Bulls should beware of a climax if the price quickly reaches the major round number at $40,000.
Concerning the USD, there will be a release of the latest FOMC meeting minutes at 7 PM London time.