Previous BTC/USD Signal
My last signal on Tuesday could have produced a long trade from the bullish pin bar rejecting the support level I had identified at $20,910, but I did make it clear bias remained bearish below $24,016.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be taken prior to 5pm Tokyo time Thursday.
Long Trade Ideas
- Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $19,977 or $19,578.
- 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 $23,000 or $24,016.
- 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 Tuesday that strong risk-off sentiment in the market had created a very bearish situation, but also there were initial signs that the price may be making a bottom just above $20k. I was looking for a short trade from a bearish reversal at the nearest key resistance level, which was situated at $24,016, likely to be the day’s pivotal point.
This was a good call as although $24,016 was not reached, the price has remained bearish below that, but the tentative bottom I called around $20k has also held.
We are now seeing a bearish consolidation between $20k and $23k, with the current dominant wave at the time of writing being bearish.
Yesterday’s FOMC statement and projections produced a minor relief rally which pushed the price up, but it ran out of steam here quite quickly at $23k.
I think shorter-term traders can enter short trades at pullbacks within bearish waves closer to $23k than $20k if the available spread is acceptable. Longer-term traders should look for a short from another reversal at $23k or wait for a daily close below $19,500 which would be a very bearish sign.
A daily close below $19,500 will indicate that Bitcoin is ready to take a bearish trip to as low as $13k.
The entire crypto ecosystem is showing severe signs of strain. However, we may see buying at the $20k area, but below $20k we will see a big wave of forced institutional liquidations which will be quite likely to trigger a further strong fall in the price of Bitcoin.
I personally will not take any long trades here under any circumstances.
There is nothing of high importance due today regarding either Bitcoin or the US Dollar.