Last Monday’s Bitcoin signals produced an excellent and very profitable short trade from the bearish reversal at the key resistance level I identified at $34,513.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades may only be taken before 5pm Tokyo time Thursday.
Long Trade Idea
Go long after a bullish price action reversal on the H1 time frame following the next touch of $28,607.
Put the stop loss $100 below the local swing low.
Adjust the stop loss to break even once the trade is $100 in profit by price.
Remove 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to ride.
Short Trade Idea
Go short after a bearish price action reversal on the H1 time frame following the next touch of $32,817, $33,298, $33,663, or $34,110.
Put the stop loss $100 above the local swing high.
Adjust the stop loss to break even once the trade is $100 in profit by price.
Remove 50% of the position as profit when the trade is $100 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 last Monday that the technical picture had become more bearish as the price chart was now dominated by a wide bearish price channel.
However, I thought that bears should not get overly excited about this, as there were many support levels below the current price within the channel, so the price was likely to have difficulty in moving down smoothly.
I was right about the bearish situation but overly attentive to the support levels, as the price fell decisively on Monday, slicing quite easily through several support levels, and is now near the lower trend line of the bearish channel.
There are no key support levels below the current price until $28,607 which is likely to be an extremely pivotal level. If it breaks down, the price of Bitcoin could fall very quickly to $20k or even $10k.
Traders should be looking for a short entry either from a bearish reversal after a retracement to $32,817, or maybe after two consecutive lower hourly closes below the lower trend line of the bearish price channel which currently sits at about $31,547. Of course, a bullish bounce at that trend line – if it holds – could make an interesting long trade entry if you are feeling brave and contrary.
I have no doubt that the greatest potential directional move in Bitcoin is likely to be downwards and not upwards.
Regarding the USD, there will be a release of PPI data at 1:30pm London time, followed later by testimony before Congress by the Fed chair at 5pm.