Last Monday’s Bitcoin signals were not triggered, as there was no bullish price action at any of the key support levels which were reached that day.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades may only be taken before 5pm Tokyo time Thursday.
Long Trade Idea
- Go long after a bullish price action reversal on the H1 time frame following the next touch of $52,274.
- 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 bullish price action reversal on the H1 time frame following the next touch of or $59,691.
- 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 although the road seems wide open to bulls, we were only seeing a weak bullishness right now, so I thought that it would make sense to wait for bearish retracements to key support levels and buy at any firm bounce. Fortunately, this was enough to keep out of trouble, as although the price descended through these support levels there were no real bounces.
The technical picture has changed to one of a flat, wide consolidation, even as the second major cryptocurrency Ethereum powers up to new record highs. It is rare to see Ethereum behave like this while Bitcoin does little, and it could be this is a strong reason to avoid buying Bitcoin right now.
I emphasise that the recent price action has been so choppy that has invalidated all important support and resistance levels within a very wide range. I think that this means the price can flow quite freely between the $60k area and the $52,250 area and will likely remain within this range over the short term.
This means that the best approach to trading Bitcoin today will likely be to trade any reversal from either of these two levels which may set up, but to otherwise sit tight and do nothing.
Bitcoin’s failure to be bullish while Ethereum hits new records suggests that a medium to long-term short trade from the $60k area could be great trade, as when the inevitable bearish retracement comes in Ethereum, it will be likely to drag down all cryptocurrencies.
Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time.