BTC/USD: Consolidating between $7,200 and $6,924
Yesterday’s signals were not triggered, as there was no bearish price action at $7,088 when the price reached it.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be entered before 5pm Tokyo time Friday.
Long Trade Idea
Go long after a bullish price action reversal on the H1 time frame following the next touch of $6,924.
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 Idea
Go short after a bearish price action reversal on the H1 time frame following the next touch of $7,200.
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 was looking for the bearish price channel and an obvious horizontal level at $7,088 to hold, so I wanted to take a bearish bias if we got a bearish reversal there. Even if the reversal happened higher than that at $7,200, I was ready to take it.
The bearish turn happened close to $7,200 after the first resistance level was broken, so this was not a bad call. The bearish channel has now been broken and the picture seems to show an emerging consolidation pattern with neither bulls nor bears having the upper hand. Short-term volatility levels are also lower than long-term volatility.
The best approach to trading Bitcoin today is likely to be scalping rejections from either of the nearby levels with no directional bias or waiting for a breakout from this range and going in the direction of the breakout.
Regarding the USD, there will be a release of Unemployment Claims at 1:30pm followed by Flash Manufacturing PMI at 2:45pm London time.