Bitcoin continues to approach long-term lows near $30k.
Previous BTC/USD Signal
Last Tuesday’s signal was not triggered as there was no bearish price action when the price first reached the resistance level which I had identified at $37,581.
Today’s BTC/USD Signals
Risk 0.50% per trade.
Trades must be entered prior to 5pm Tokyo time Friday.
Long Trade Ideas
- Go long after a bullish price action reversal on the H1 timeframe following the next touch of $32,817, $31,630, $31,015, or $30,000.
- 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 $35,583 or $37,179.
- 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 on Tuesday that the picture was essentially bearish and there was bearish momentum that suggested the price would likely continue to fall. This was a good and correct call, although the price did not reverse at one of my identified resistance levels to give a short trade entry.
Bitcoin was already acting bearishly and in the past few hours, with Russia now launching a military attack across Ukraine, risk assets have been hit quite hard. Bitcoin is no exception, which must come as a surprise to the most naïve crypto enthusiasts.
The price is reaching one month lows and looks set to continue falling until it reaches the cluster of very long-term support levels between $30k and $32,817.
With the war in Ukraine very unlikely to cease, it is highly probable we will see Bitcoin continue to fall over the day and reach at least as low as $32,817. It may be a winning strategy to short bullish retracements when they begin to turn bearish without looking for resistance levels. I would not take any long trades today. However, once the price reaches possibly $32,817 or maybe $30k it could find some support.
In such a crisis environment, it is important to trade very carefully and to understand relying on support and resistance levels can be extremely ineffective.
Regarding the USD today, there will be a release of Preliminary GDP data at 1:30pm London time.
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