BTC/USD: Important breakdown below $7,700
Yesterday’s signals were not triggered, as the bullish price action took place between $7,698 and $7,477 and not either of these key levels precisely enough.
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 $7,228 or $6,793.
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 $7,670, $8,004, or $8,162.
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 a long-term long trade from $7,700 could have an edge, but over the shorter-term, shorting reversals following retracements to the resistance levels given was likely to be a better strategy.
This was a good call, as the price has broken below $7,700 and maintained its short-term bearish bias which I thought was the most likely outcome. The key resistance level confluent with $8,000 was also extremely close to the day’s high.
The strong risk-off moves in financial markets have hit Bitcoin and are likely to continue to do so. Therefore, I take a bearish bias on Bitcoin, with the best potential set-up looking like being a bearish reversal at any nearby resistance level, especially $7,670 which looks likely to be very strong resistance if it is hit.
There is nothing of high importance due today regarding the USD.