My previous BTC/USD signal on 17th January was not triggered as none of the key support or resistance levels which I had identified were reached.
Today’s BTC/USD Signals
- Risk 0.75% per trade.
- Trades must be entered before 5pm Tokyo time Friday.
Long Trade Ideas
- Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $39,501 or $39,043.
- Place 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 run.
Short Trade Ideas
- Short entry after a bearish price action reversal on the H1 timeframe following the next touch of $40,423, $40,665, $41,246, or $41,445.
- Place 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 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.
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BTC/USD Analysis
I wrote in my previous BTC/USD analysis on 17th January that seemed to have found some support above $41,527 which was likely to hold. This was a good call as far as that support level did hold over the day.
The technical picture now is more bearish as the decline from the 20-month high reached two weeks ago has continued, with the price trading below the big round number at $40,000 and breaking below some support levels which have now likely flipped to become resistance.
Despite this bearishness, over the past couple of days the price has firmed up and established a couple of higher lows and support levels. However, the price chart below shows that the price is well within a bearish price channel, although the lack of symmetry in the channel suggests that it may not be very reliable. Nevertheless, there is a confluence of the upper trend line of this channel with a zone of resistance stretching from $40,423 to $40,665. This looks likely to be a great place to enter a short trade if we get a bearish reversal rejecting that area.
The short-term momentum looks bullish, so the best strategy for today looks likely to wait for the price to reach $40,423.
If the price spends a few hours later trading above $40,665 that will be a very bullish sign.
Regarding the US Dollar, there will be a release of US Advance GDP and Unemployment Claims data at 1:30pm London time.
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