Bitcoin: Bullish breakout still holding above the long-term trend line.

Yesterday’s signals were not triggered as although the resistance level identified at $9,489 held the bearish price action was insufficiently strong to give an entry signal.

Today’s BTC/USD Signals

Risk 0.75% per trade.

Trades may only be entered before 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 $8,893, $8,458, or $8,102.
• Put the stop loss 1 pip 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 Ideas

• Short entry after a bearish price action reversal on the H1 time frame following the next touch of $9,489 or $10,440.
• Put the stop loss 1 pip 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 there was a short-term bearish sign with new lower resistance forming at $9,489 close to $9,500. It seemed there was selling from $10,000 but it was also true that we had a more bullish situation and the bulls should come back soon if the support at $8,893 held up after it next got tested from above. For this reason, I was still looking to take a bullish bias following a solid bounce at that level later.

I would still apply this analysis today as the price has continued to hold up, although the resistance level at $9,489 held gently. I see the best opportunity as likely to arise on the long side so I would take a bullish bias if we get a bounce at $8,893 and I would not take any short trades today.

There are very important USD data releases due later today which may move the price a little, but Bitcoin volatility is so relatively large in USD terms that it is unlikely to be very significant.

(Click on image to enlarge)

Regarding the USD, there will be releases of ADP Non-Farm Employment Change data at 12:15pm London time, followed by Advance GDP at 12:30pm, and the FOMC Statement / Federal Funds Rate at 6pm then the usual press conference half an hour later.