Bitcoin: Very strong bearish breakdown
Yesterday’s signals were not triggered, as there was no bullish price action at any of the several support levels which were reached.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may be taken prior to 5pm Tokyo time Thursday.
Long Trade Ideas
- Long entry after a bullish price action reversal on the H1 time frame following the next touch of $8,071, $7,930, or $7,754.
- Place the stop loss 1 pip below the local swing low.
- Move the stop loss to break even once the trade is $50 in profit by price.
- Remove 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to run.
Short Trade Ideas
- Short entry after a bearish price action reversal on the H1 time frame following the next touch of $8,893 or $9,073.
- Place the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is $50 in profit by price.
- Remove 50% of the position as profit when the trade is $50 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 wrote yesterday that the picture had become more bearish, with a formerly supportive area flipping to become new resistance at $9,833. I was ready to take a bearish bias if we had gotten two consecutive hourly closes below $9,500 later today. This was a great call as it produced an extremely profitable short trade.
The price continues to fall, and it seems probable that support levels will be completely ignored as the bearish momentum rolls on. For this reason, I would not take any long trades today, but would look only for a short trade from a failure after a bullish retracement to a key resistance level. Generally, I simply take a bearish bias here, as this technical breakdown to prices much lower than the psychological round number at $10,000 is very significant.
Regarding the USD, there will be a release of Crude Oil Inventories data at 3:30pm London time.