My previous BTC/USD signal on 11th January produced an excellent, nicely profitable long trade from the bullish bounce which rejected the key support level identified at $45,686.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be taken prior to 5pm Tokyo time Thursday.
Long Trade Ideas
- Go long after a bullish price action reversal on the H1 timeframe following the next touch of $41,527, $41,426, or $40,623.
- Put 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 ride.
Short Trade Idea
- Go short after a bearish price action reversal on the H1 timeframe following the next touch of $43,438, $44,508, or $44,648.
- Put 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 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
I wrote in my previous BTC/USD analysis on 11th January that Bitcoin’s technical picture was looking bullish above $44,648 after building a new wedge pattern and showing short-term bullish momentum. However, I really wanted to see the price make a new long-term high price before entering a new long trade.
This was a good call as although the price did make a bullish breakout that day to a new 20-month high price, the spike quickly fell back, and the price did not end the day with a new higher daily close. Since then, the price has continued to fall.
Last week US regulators approved the issue of Bitcoin ETFs, and this was seen as likely to drive the price higher. However, more astute observers thought that this would likely be a case of “buy the rumour, sell the fact” and this proved to be true. After the regulatory approval was given, the price fell quite firmly.
Despite the recent bearishness, the price does seem to have found some support above $41,527 which shows the highest point of a cluster of support levels centred on the big round number at $40k. Conditions are not bullish but we do have a valid long-term bullish trend which could well reassert itself, and this becomes more likely the longer that the support level at $41,527 continues to hold.
I think the best opportunity today is likely to be a long trade from a bullish bounce at $41,527. This will be a very speculative trade but if Bitcoin takes off again and rises to make new long-term highs, it could turn out to be a great entry point.
Regarding the US Dollar, there will be a release of US Retail Sales data at 1:30pm London time.
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