Descending Channel but Supported at $2

Bitcoin has not yet made a decisive bearish breakdown.

My previous BTC/USD signal on 19^th July was not triggered as none of the key support or resistance levels were reached that day.

Risk 0.50% per trade.

Trades must be taken prior to 5pm Tokyo time Wednesday.

• Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $28,810, $28,626, or $28,331.
• 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.
• Remove 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 entry after a bearish price action reversal on the H1 timeframe following the next touch of $29,424, $29,867, or $30,092.
•  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.
• Remove 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.

I wrote in my previous BTC/USD analysis on 19^th July that the supportive area below $30k was starting to come into question as the price persisted in moving down within a bearish price channel. I thought that this was likely to continue to move the price down to the nearest support level at $29,424.

This was a good call over the medium term as although none of the key levels were reached that day, the price has continued to descend, get below $29,424, and continue descending within the expanding bearish price channel.

The technical picture now has not changed very much, we have the same look of a major bearish reversal having happened at the $31k area, with the price now near the bottom of the channel, but we also see a small head and shoulders pattern which seems to have made a short-term bullish rejection of the round number at $29k as support.

It is hard to see that the price will fall more over the short-term, but it may not be able to rise much higher either.

I do see a potential long trade opportunity from another bullish bounce which might happen at $29k, the lower trend line of the descending price channel, or the support level at $28,810. A simultaneous test and rejection of all three within an hour or so could be a great long entry signal, but it will probably be wise to treat such a trade as a scalp and be ready to exit with profit quite quickly.

Concerning the US Dollar, there will be a release of US CB Consumer Confidence data at 3pm London time.

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