Last Monday’s signals were not triggered, as there was no bearish price action at the resistance level identified at $39,717 that day.
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 $44,898 or $41,021.
Place the stop loss $100 below the local swing low.
Move the stop loss to break even once the trade is $100 in profit by price.
Take off 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to run.
Short Trade Idea
Short entry after a bearish price action reversal on the H1 time frame following the next touch of $50,000.
Place the stop loss $100 above the local swing high.
Move the stop loss to break even once the trade is $100 in profit by price.
Take off 50% of the position as profit when the trade is $100 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 last Monday that after peaking just below $41K on Saturday, the price had printed new lower resistance at $39,717 and was consolidating below there. This level looked very likely to be the day’s pivotal point, so if we got two consecutive hourly closes above it, I was ready to take a bullish bias on Bitcoin for the day.
This was a great call, as coincidentally, that resistance level held until news broke of Tesla’s purchase of $1.5 billion of Bitcoin which send the price higher by 11% in just an hour. This produced a long trade entry an hour later at about $43,000 and at the time of writing, the price is up about 7% from there, so this should have been a nicely profitable trade signal.
The price peaked about 24 hours ago at the all-time high of $48,178. We have seen a bearish retracement, but it is nothing out of the ordinary and does not threaten the basically very bullish technical picture we see right now. Bitcoin is the subject of a lot of bullish speculative interest at present and the odds should be in favour of still higher prices due to the “blue sky” above, but the big round number at $50k could act as resistance, as could yesterday’s high price.
I see Bitcoin remaining an interesting short-term buy if we get two consecutive hourly closes later today above $50,000 or if we get a bullish bounce between $44,900 and $45,000.
A sustained bearish breakdown below $44,000 could see a rapid downwards movement resulting.
Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm London time.