Bitcoin: Congested and confusing
Yesterday’s signals were not triggered as there was no bullish price action when the support level identified at $7,414 was reached.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades must be entered prior to 5pm Tokyo time Wednesday.
Long Trade Ideas
Go long after a bullish price action reversal on the H1 time frame following the next touch of $7,131 or $6,786.
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 $7,445, $7,698 or $7,824.
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 we had a weakly bullish sign: a new ascending trend line covering recent days. However, I did not have strong confidence in this ascending trend line as it had not been touched much. Nevertheless, the support level at $7,414 looked pivotal.
I was wrong in the sense that the price has no real direction and has broken below the aforementioned trend line. This would usually be a bearish sign but looking at the price chart below, it becomes obvious that volatility is shrinking, and the price action is quite choppy and directionless. There are a lot of support and resistance levels nearby, so price movement is likely to be difficult to predict.
It will probably be wise to stand aside from trading Bitcoin for the time being. It could make sense to be bearish below $7,131 or bullish above $7,824. I take no directional bias in the meantime.
There is nothing of high importance due today concerning the USD.