Bitcoin: Deeper bearish retracement
Yesterday’s signals may have triggered a profitable short trade from $8,375 while the bullish price action took place a little way below $7.968.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm Tokyo time Friday.
Long Trade Ideas
Long entry after a bullish price action reversal on the H1 time frame following the next touch of $7,698 or $7,477.
Place the stop loss 1 pip below the local swing low.
Move 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 run.
Short Trade Ideas
Short entry after a bearish price action reversal on the H1 time frame following the next touch of $8,200 or $8,375.
Place the stop loss 1 pip above the local swing high.
Move 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 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 yesterday that it looked as if the price was making a bearish retracement, but would probably find support and begin rising again, so I was ready to take a bullish bias if we had gotten a nice bounce at any of the support levels I had identified. Fortunately, there was no such bullish bounce, and the price has continued to fall creating a new lower probable resistance level at $7,947.
With a strengthening USD, it looks as if a deeper bearish pullback is underway. I see the most probable support level where we are likely to get a bullish turn as $7,477 because it is so confluent with $7,500, therefore I would take a bullish bias later if we do get a bounce there.
On the bearish side, it seems we have some momentum and although the technical formation shown in the price chart below is not exactly a valid bearish head and shoulders pattern, it is close to one.
There is nothing of high importance due today concerning the USD.