BTC/USD: Strong resistance likely at $7,228
Yesterday’s signals were not triggered as none of the key levels identified have been reached yet.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be taken prior to 5pm Tokyo time Thursday.
Long Trade Ideas
Go long after a bullish price action reversal on the H1 time frame following the next touch of $6,418, $6,089, or $5,683.
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 $7,228, $7,670 or $8,004.
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 that I would take a weakly bullish bias today if we had gotten a bullish bounce from a pullback to the support level at $6,418. This could have been a good call as the price has continued to rise, but unfortunately the price never quite reached that support level.
The technical picture is now a little more bullish, but the next resistance level above looks strong, so it is quite likely to struggle to break that if reached.
There has been a recovery in risk sentiment over recent hours as the U.S. announces a $2 trillion rescue package which has helped hold up the Bitcoin price, but how long that improvement will last is a good question – I think not for very long, so I see a short-term long trade from the nearest support as a good potential trade but I see a medium-term short trade from a reversal at $7,228 as an even better opportunity if it sets up today.
There is nothing of high importance scheduled today regarding the USD.