Previous BTC/USD Signal
My last signal on 25th May was not triggered, as there was no bullish price action when the price reached the support level which I had identified at $29,559.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be entered prior to 5pm Tokyo time Friday.
Long Trade Ideas
- Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $29,559, $29,092, or $27,981.
- Place 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.
- 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 Ideas
- Short entry after a bearish price action reversal on the H1 timeframe following the next touch of $29,995 or $30,917.
- Place 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.
- 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 in my last analysis on 25th May that $28,607 was the level to watch. A daily close below that level, and preferably below $28,000, could trigger a very strong downwards move all the way to $10k or below. However, it was starting to look as if this level would hold, so I also saw it as offering a great risk reward ratio on a long trade entry.
This was a good call as $28k continued to hold, and it eventually produced, some days later, a bullish move up to the $32k area, where the bullish momentum ran out of steam and the price topped out.
The technical picture is looking more bearish now, with the price falling quite strongly a few hours ago, printing new lower resistance just below $30k. However, short-term movement looks very unpredictable, as there is also support very close by at $29,559 which has held the price up effectively over recent hours.
I think the best strategy for now is to stand aside until the price tests the $28k area again, and to watch what happens. I doubt we will see a close below that level at the end of today, but I would be happy to enter a short trade if it does.
If Bitcoin recovers and gets established above $32k / $33k, that will be a bullish sign.
There is a great deal of fear in crypto markets now, with questions being raised over the viability of minor coins and aspects of the crypto ecosystem. However, this may benefit the major cryptocurrencies such as Bitcoin and Ethereum in the end, as crypto investors and speculators could move more heavily into these coins as safer bets.
Regarding the US Dollar, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time.