Bitcoin: Bullish consolidation above $8,893 holds
Yesterday’s signals produced a profitable short trade from the bearish pin candlestick which rejected the resistance level at $9,438 on the hourly chart just after the New York close. It would probably be wise to exit this as soon as possible due to the bullish trend and the fact that the price has also reached a support level, which held.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be taken prior to 5pm Tokyo time Wednesday.
Long Trades
Go long at a bullish price action reversal on the H1 time frame following the next touch of $8,893 or $8,610.
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 Trades
Go short after a bearish price action reversal on the H1 time frame following the next touch of $9,438 or $9,620.
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 yesterday that we were now seeing a bullish consolidation between $8,893 and $9,400. I wanted to be very, very careful in taking any short trades here now over the next day. I was fine with long trades. I thought that a sustained break above $9,438 would be a very bullish sign.
This was a fairly good call, although the best trade was a short trade – I wanted to be cautious about that, but the rejection printed a large bearish pin candlestick at the resistance level of $9,438 which was a good sign for that short trade.
Although the action is still quite consolidative, the picture is marginally more bullish today, as we got a higher high and a higher support level holding above $9,000 which is shown on the chart below, although I would not want to use this level yet.
I would take a bullish bias if the price can make a sustained break above $9,438 later today.
There is nothing important due today concerning the USD.