BTC/USD: Supported at $8,500
Yesterday’s signals produced a losing long trade from the bullish bounce rejecting the support level identified at $8,683.
Today’s BTC/USD Signals
Risk 0.50% 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 $8,504, $8,461, $8,375, or $8,216.
Place the stop loss $50 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 $9,275 or $9,460.
Place the stop loss $50 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 I was comfortable taking a short trade bias from a bearish reversal at any resistance level reached today, or even $9,250. This was a good call and taking a short bias only would have kept you out of trouble. As it happened, the key bearish reversal was at $9,275.
The technical picture is much more bearish with the downwards move clearing out the support levels all the way down to the $8,500 area. The support could be firm down there as there are a cluster of support levels close below that price.
However, it looks as if this move has played out for the time being, with the price stabilizing somewhat and it will now have room to consolidate, possibly in wide swings, so there could be deep bullish retracements.
Market sentiment is firmly risk-off and this should be negative for Bitcoin, so I continue to look for short trades only.
There is nothing of high importance due today regarding the USD.