Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades may only be taken before 5pm Tokyo time Tuesday.
Long Trade Ideas
Long entry after a bullish price action reversal on the H1 time frame following the next touch of $48,746, $48,061, or $46,595.
Put the stop loss $100 below the local swing low.
Adjust the stop loss to break even once the trade is $100 in profit by price.
Remove 50% of the position as profit when the trade is $100 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 $51,364 or $54,864.
Put the stop loss $100 above the local swing high.
Adjust the stop loss to break even once the trade is $100 in profit by price.
Remove 50% of the position as profit when the trade is $100 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
Bitcoin really turned around over the month of August after moving down in a long-term bearish trend for quite a while. I had thought towards the end of July that we were likely to see a major bearish breakdown in Bitcoin below $30k which would have seen the price fall to $20k or even $10k but the bulls defended $30k effectively. Over the last four weeks we have seen Bitcoin rise steadily from the $30k area and now, finally, it is trading above $50k which is psychologically important, representing a value increase of approximately 66% within this short time.
Technically there is nothing special to note about the bullishness except to say that the price has only just breached $50k and not by much, so it may need a bearish pullback before the price can make another upwards thrust.
I will certainly be looking for a long trade here in Bitcoin, but an attractive entry point looks somewhat unclear. The inflective point at about $49,750 might work, but the support at $48,746 looks more likely to be reliable. I will take a long trade if we get a bullish bounce at either of the two nearby support levels following a bearish retracement.
It is interesting and possibly significant that while risk currencies have lost a lot of ground against the U.S. dollar recently, Bitcoin – which is arguably a very risky asset – has advanced strongly. This is a bullish hint that Bitcoin has a lot of buoyancy and won’t break down in a way that sees it lose most of its value.
Concerning the USD, there will be releases of Flash Manufacturing and Services PMI data at 2:45pm London time.