BTC/USD: Room remains for lots of upside
Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level identified at $10.985 was first reached.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be taken before 5 pm Tokyo time Thursday.
Long Trade Ideas
- Go long after a bullish price action reversal on the H1 time frame following the next touch of $10,696, $10,456, $10,123 or $10,039.
- Put the stop loss $50 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
- Go short at the next touch of $13,218.
- Put the stop loss $50 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 yesterday that I thought that we would not see higher prices beyond the previous day’s peak for at least a few days, suggesting that the best opportunity was likely to be on the short side.
Therefore, I was prepared to take a short trade today from a bearish reversal at $10,985.
This call was enough to keep out of trouble as we did not get any bearish price action at $10,985 and this former resistance level has been clearly invalidated.
I have also been correct, at least so far, that we would not see new highs any time soon, with the peak made earlier in the week still holding.
However, I do think the technical picture is looking more bullish now, with a short-term consolidating triangle forming which looks likely to see upside breakout. So, I think new highs are quite likely to happen soon. Despite that, I do not like the idea of taking a long trade from a bounce at support as that would require a bearish breakdown of the triangle.
This means overall that I do not see a good opportunity here, although the FOMC release later could trigger a strong move. The only possibility might be a short trade from $13,218 in the very unlikely event that the price gets up there later after the release.
Regarding the USD, there will be a release of Pending Homes Sales data at 3pm London time, followed by the FOMC Statement and Federal Funds Rate at 7pm then the usual press conference half an hour later.