Bitcoin: More bearish but supportive trend line intact
Yesterday’s signals were not triggered, as there was insufficiently bullish price action at $9,801 when it was first reached.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be taken before 5pm Tokyo time Wednesday.
Long Trade Ideas
Go long at a bullish price action reversal on the H1 time frame following the next touch of the ascending trend line shown in the price chart below currently sitting at about $9,567 or the horizontal level at $9,073.
Put 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 $9,833 or $10,062.
Put 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 the price chart was dominated by the long-term bearish trend line which was suppressing the price. I was ready to take a bearish bias later if we had gotten two consecutive hourly closes below the strong support at $9,801, as the larger technical picture was suggesting a breakdown. This was a good call as that level did break down, and the price is currently about $75 per coin lower than the entry point given yesterday for a short trade.
The picture is more bearish, with a formerly supportive area flipping to become new resistance at $9,833. However, there is a long-term bullish trend line below and an inflective area which has seen buying recently, and these may prevent much of a further fall, so bears need to be careful.
I would take a bearish bias today if we get two consecutive hourly closes below $9,500 later today.
Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.