Last Thursday’s signals produced an excellent, profitable long trade from the small bullish pin candlestick on the hourly chart which rejected the support level at $3,998. The action still looks bullish, but the price may be making a short-term double top just under $4,140.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be entered between 8am New York time Monday and 5pm Tokyo time Tuesday.
Long Trades
- Go long at a bullish price action reversal on the H1 time frame following the next touch of $4,056, $4,030, or $3,998.
- Place the stop loss 1 pip below the local swing low.
- Adjust the stop loss to break even once the trade is $50 in profit by price.
- Take off 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to ride.
Short Trade
- Go short after a bearish price action reversal on the H1 time frame following the next touch of $4,374.
- Place the stop loss 1 pip above the local swing high.
- Adjust the stop loss to break even once the trade is $50 in profit by price.
- Take off 50% of the position as profit when the trade is $50 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 last Thursday that the resistance at $4,008 has been invalidated, and we have seen several closes barely above it, yet we were still seeing action suggestive of topping out. However, there was another bullish sign which was the new higher support level forming at $3,998 but I am not optimistic that it will hold. I thought this was likely to break down but that if the price could close above $4,040 for a couple of hours consecutively, that would be a bullish sign.
I was right about the key levels, and after an initial push up, it was when the price cleared $4,040 that the bulls really took off and pushed the price higher in a firm move.
The picture is now clearly more bullish, and the price has plenty of room to rise before hitting the next resistance level. However, there are some signs that the price may be topping out just below $4,140. We may get minor support at $4,100. I am generally bullish, but unsure about picking good entry points for long trades.
Regarding the USD, there will be a release of Retail Sales data at 12:30pm London time followed by ISM Manufacturing PMI at 2pm.