Yesterday’s signals produced a losing short trade following the bearish engulfing candlestick which rejected the former resistance level identified at $7,347.
Today’s BTC/USD Signals
Risk 1.00% per trade.
Trades may be entered at any time during the next 24 hours period.
Long Trades
Go long after a bullish price action reversal on the H1 time frame following the next touch of $6,811, or $5,639.
Place the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is $200 in profit by price.
Remove 50% of the position as profit when the trade is $200 in profit by price and leave the remainder of the position to run.
Short Trades
Short entry after a bearish price action reversal on the H1 time frame following the next touch of $7,990 or the bearish trend line shown in the chart below currently sitting at about $8,500.
Place the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is $200 in profit by price.
Remove 50% of the position as profit when the trade is $200 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 painted a very bearish picture yesterday and I turned out to be completely wrong, at least over the short-term. The price recovered strongly from the low with a clearly impulsive movement, wiping out resistance and printing new and higher support at $6,811. It is interesting that this recovery corresponded to the strong recovery in the U.S. stock market, because it suggests that Bitcoin is seen as a risky stock rather than as a currency or commodity, which makes sense.
Despite the bullish impulsive movement, there is a medium-term bearish trend line at about $8,500 which is likely to be a severe test for Bitcoin bulls. If the price can break above this level it would be a bullish sign. The momentum seems to be with the bulls right now, but I have no directional bias.
Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time.