Last Monday’s Bitcoin signals may have produced a losing short trade from the single bearish pin candlestick which rejected the resistance level identified at $48,207 on the hourly chart.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades may only be entered prior to 5pm Tokyo time Thursday.
Long Trade Ideas
Long entry after a bullish price action reversal on the H1 time frame following the next touch of $46,875 or $45,477.
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 Ideas
Short entry after a bearish price action reversal on the H1 time frame following the next touch of $51,837 or $55,146.
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 crucial thing to watch out for technically was whether the price could get established above the upper trend line of the bearish wedge which was containing the price – if so, this would be a bullish sign. I was ready to take a bullish bias on Bitcoin if we would get two consecutive hourly closes above $50K, or a bearish bias if we had seen the same below $42K.
This was a good call although not actionable that day. The price remained above $42K and is only now, at the time of writing, breaking convincingly above $50K. However, Monday did see a breakout from the bearish wedge chart pattern I identified, and that was an early bullish indicator to the wider and stronger bullish movement which we are seeing now.
The technical picture is clearly bullish now, with the price clearing $50K with firm bullish momentum. However, the resistance level which I have identified at $51,837 looks convincing and might be hard to break. If it is broken today by two consecutive higher closes above it on an hourly chart, that would be a very bullish sign, and I would take a bullish bias in that case up to the next resistance level at $55,146.
A short trade may set up if we see a failure later at $51,837, but I would want to see some strong bearish momentum for an hour two before any such entry, with the price below $50K.
There is nothing of high importance due today concerning the USD.