There is a medium-term bottom below $40k.
Previous BTC/USD Signal
My previous signal on 4th April was not triggered, as there was no bullish price action when the price first reached the support level which I had identified at $45,595.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be taken 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 $38,961 or $37,179.
- 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 $41,706, $42,418, or $44,160.
- 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 piece on 4th April that the price was likely to consolidate between $45,595 and $46,982 over the day. If the price got established later below $45,595 that would be a bearish sign. The price briefly dipped below $45,595 but apart from that blip, the range held for the day, so this was a fairly good call. It was an even better call over the rest of the week, as when the support level at $45,595 broke down conclusively, it was followed over the next days by a stronger and continuing move down.
This bearish movement continued until this week, when the price found support just above $38,961 and made a higher low / bullish “over and under” bullish pattern, which has succeeded in pushing the price up to challenge the nearest resistance level at $41,706, where the short-term price action suggests that the level will hold today.
We have two seemingly strong levels of resistance nearby, and weak price action, so I could not be bullish until the price breaks above the higher of the two resistance levels at $42,418.
There is scope for Bitcoin to advance with the US Dollar reversing yesterday and finally starting to sell off solidly. But so far it seems that fiat currencies will benefit more than Bitcoin from the Dollar’s decline.
A short trade could be possible from a reversal at either of the two nearby resistance levels, or a long trade once the price gets established above $42,418.
Concerning the USD, there will be a release of Retail Sales data at 1:30pm London time.