Bitcoin: Strong bullish breakout beyond $10k continues
Yesterday’s signals were not triggered, as none of the key levels were reached.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm Tokyo time Wednesday.
Long Trades
Go long at a bullish price action reversal on the H1 time frame following the next touch of $10,800 or $10,250.
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 $11,508, $11,646, $11,781 or $11,864.
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 there was every reason to be bullish, we had a long-term bullish trend, advancement to new multi-month highs, and finally a sustained break above the big psychological round number at $10k.
I was ready to take a bullish bias if we had got a bullish bounce at $10,250.
I was correct about the bullishness as the price has continued to firmly advance higher, even as other assets such as Gold have started to make deep pullbacks against the strongly bearish trend in the U.S. Dollar. This is a bullish sign.
Despite all the good reasons to be bullish, the price chart below shows that after moving through quite a lot of “blue sky” breakout territory, the price now faces a bunch of resistance levels between $11,500 and $11,864. I think the rice will need to retrace for a while before being able to break up solidly above this area, so it might be wise to take profits on any long trades at $11,500. Alternatively, if the price can break up above $11,864 that would be an extremely bullish sign that prices would be likely to get much higher still.
I would take a bullish bias if we get a retracement to the support at $10,800 and a strong bullish bounce there.
Concerning the USD, there will be a release of CB Consumer Confidence data at 3pm London time, followed by a speech on monetary policy from the Chair of the Federal Reserve at 6pm.