Bitcoin: Very bearish; new 6 month low prices
Last Thursday’s signals were not triggered, as there was no bullish price action at either of the support levels which were reached that day.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be entered before 5pm Tokyo time Tuesday.
Long Trade Ideas
⦁ Long entry after a bullish price action reversal on the H1 time frame following the next touch of $6,441, $6,171, or $5,950.
⦁ 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
⦁ Short entry after a bearish price action reversal on the H1 time frame following the next touch of $6,774, $6,954, or $7,122.
⦁ 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 last Thursday that a sustained break below $7,754 would be a very bearish sign if it happened. However, I also saw $7,754 as a level in play for long-term buyers.
The price easily broke strongly below $7,754 when it was first reached, and this was a sign that the price was going to drop much further. I did say things would get very bearish below that price, and so it proved to be, with a further fall of more than 10%. Bitcoin has now reached new 6-month low prices, which is another bearish sign.
There is always the danger with Bitcoin of long-term buyers stepping in, but the picture is certainly very bearish and so the odds should still be in favour of short trades at any resistance level which is reached and immediately produces a bearish reversal in the price action. I would take a bearish bias if we get such a short trade entry set up today.
There is nothing of high importance due today concerning the USD.