Bitcoin: Bearish price channel
Yesterday’s signals produced a nicely profitable short trade from the bearish rejection of the resistance level at $8,154.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be taken prior to 5pm Tokyo time Friday.
Long Trade Ideas
⦁ Go long after a bullish price action reversal on the H1 time frame following the next touch of $7,754 or $7,202.
⦁ 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
⦁ Go short after a bearish price action reversal on the H1 time frame following the next touch of $8,154, $8,375 or $8,703.
⦁ 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 price movement had created a new lower “stairstep” resistance level at $8,154. This could again provide a great short trade entry opportunity. This was a good call, as it did so, and the price has continued to move down in an orderly bearish way, with the bearish channel holding firmly and cleanly.
I also noted yesterday that the nearest support level shown in the chart at $7,754 could become a very interesting entry point for long-term buyers, due to its confluence with the lower channel trend line and the psychological quarter-level at $7,750. The confluence is even stronger today and this level is certainly in play as a possible entry point for long-term buyers. Anyone holding a short trade should seriously consider taking at least partial profits in the $7,754 area.
A sustained break below $7,754 would be a very bearish sign if it happens.
There is nothing of high importance due today concerning the USD.