Looking heavy at $22,236.

Previous BTC/USD Signal

My previous signal on 20^th July was not triggered as the reversals took place beyond the key levels which I had identified that day as probable support and resistance.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 5pm Tokyo time Tuesday.

Long Trade Ideas

• Go long after a bullish price action reversal on the H1 timeframe following the next touch of $23,266 or $21,449.
• 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

• Go short after a bearish price action reversal on the H1 timeframe following the next touch of $24,372 or $25,000.
• 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 previous analysis on 20^th July that the price of BTC/USD was likely to continue rising due to the strong short-term bullish momentum and lack of any foreseeable risk events. This was an OK call insofar as the price rose over the London session, but eventually ended the day lower.

The Bitcoin rally continued over the past week, reaching a new 6-week high last Thursday, but not by much. The price quickly reversed and has been trading downwards ever since. However, the price still remains within a symmetrical bullish price channel but has fallen from an area near the top of the channel.

The price now seems to have reached a pivotal point: the support level at $23,266. This support has not yet broken down, but the price does look heavy here and we could well see a breakdown today. If the breakdown does happen, it could be quite strong as there are no support levels below until $21,449 so the price has plenty of room to fall. The lower trend line of the bullish price channel is well below that horizontal level and trend line analysis can be very useful for an asset as responsive to technical analysis as Bitcoin typically is.

I see the best approaches to Bitcoin today as looking for a long trade from a bullish bounce at $23,266, or if that level breaks down, a short trade below it, ideally from a failed retest of the level from below, with the short entry coming after the price bounces bearishly off $23,266. Shorter-term traders might not wait for the retest and instead just try to sell on short-term rallies as they turn bearish.

Concerning the US Dollar, there will be a release of ISM Manufacturing PMI data at 3pm London time.

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Support below $39k has kicked in again.

Previous BTC/USD Signal

My previous signal on 14^th April was not triggered, as none of the key levels I had identified were reached by the price that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 5pm Tokyo time Wednesday.

Long Trade Ideas

• Go long after a bullish price action reversal on the H1 timeframe following the next touch of $39,321 or $38,659.
• Put the stop loss $100 below the local swing low.
• Move 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

• Go short after a bearish price action reversal on the H1 timeframe following the next touch of $40,907, or $41,706.
• Put the stop loss $100 above the local swing high.
• Move 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 in my last piece on 14^th April that as we had two seemingly strong levels of resistance nearby, and weak price action, so I could not be bullish until the price broke above the higher of the two resistance levels at $42,418. I also saw good scope for a short trade from a reversal at a nearby key resistance level.

This was a good call insofar as I was correct about the price not having much upside until $42,418, and the price fell over the day without ever reaching that level. The price has not moved much over the past couple of weeks since that day and has just been consolidating above $39k.

The picture now is one of short-term bullish momentum after reaching the key support area just below $39k, but the price action shows the momentum is fading now. The price is close to two resistance levels and a medium-term bearish trendline which is shown in the price chart below. This suggests that the price is going to struggle to rise much further over the short term, reinforced by the fact that the price has been ranging and so is likely to continue doing so.

I see the best potential today as a short trade from a bearish reversal at either of the nearby resistance levels, with $40,907 looking attractive, and $41,706 looking likely to be strong as it is currently confluent with the descending bearish trend line.

If we get two consecutive hourly closes above $41,706 later, that will be a bullish sign, and I would take a bullish bias.

There is nothing of high importance due today concerning the USD.