Bitcoin: Bearish consolidation below $7,260
Last Tuesday’s signals produced a losing long trade from the pin bar on the hourly chart which rejected the support level identified at $7,221.
Today’s BTC/USD Signals
Risk 0.75% per trade.
Trades may only be taken before 5pm Tokyo time Friday.
Long Trade Idea
Long entry after a bullish price action reversal on the H1 time frame following the next touch of $6,786.
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 $7,260 or $7,456 or $7,698.
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 Tuesday that it was very likely that how the price reacted at $7,221 would determine its course for the rest of the day. So, I was seeking to take a weakly bearish bias if we had gotten a couple of hours of consecutive closing prices later below that level. This was enough to keep out of trouble as the price did not do this to get established below $7,221.
Although the price has not moved much, there are some interesting new technical signs. Firstly, the old level at $7,221 has been invalidated. The key pivotal point now seems to be resistance at $7,260. Yet even if the price can get established above that level and rise as far as $7,456 it would seem to only be completing the final hump of a bearish head and shoulders pattern indicating another downwards move would be imminent.
I remain ready to take a short trade, in line with the long-term bearish trend, from a rejection of $7,260 or $7,456 with $7,456 looking like a very ripe opportunity.
There is nothing of high importance due today concerning the USD.