Bitcoin: Strong bearish move from $13,166
Yesterday’s signals were not triggered as there was insufficiently bullish price action at any of the support levels.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm Tokyo time Friday.
Long Trade Idea
Long entry at a bullish price action reversal on the H1 time frame following the next touch of $10,805.
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 Ideas
Go short after a bearish price action reversal on the H1 time frame following the next touch of $11,726 or $12,171.
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 a break above $13,166 would be a very bullish sign, but the price may well fail before reaching the next resistance at $14,256 as the recent high price is between these levels.
I was ready to take a bullish bias if the price would close above $13,166 for a couple of hours consecutively.
This was a good call as it correctly identified the day’s pivotal level, which was clearly at $13,166. The strong fall we have seen over the last day in the price of Bitcoin tells us that the market was not ready to break to new highs, and the recent range is maintained. Moreover, this pullback is relatively deep, but not terminally so, so although it puts the bulls in question, the bullish party is not necessarily over yet. Nevertheless, the momentum is bearish.
I take no directional bias today and I think it would be wise to stand aside for at least a day to see how the picture settles after this fall.
Concerning the USD, there will be a release of CPI (Inflation) data at 1:30pm London time today, followed by testimony from the Chair of the Federal Reserve before the Senate at 3pm..