Bullish Breakout or New Bearish Price

Bitcoin should now be attractive to traders as it has seen an injection of volatility which is likely to continue.

My previous BTC/USD signal last Monday was not triggered as there was insufficiently bullish  price action when the key support level at $28,810 was first reached that day.

Risk 0.75% per trade.

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

• Go long after a bullish price action reversal on the H1 timeframe following the next touch of $29,349, $29,270 or $28,810.
• 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.
• 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 ride.

• Go short after a bearish price action reversal on the H1 timeframe following the next touch of $29,681, $29,867, or $30,092.
• 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.
• 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 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.

I wrote in my previous BTC/USD analysis last Monday a sustained breakout above $29,500 could be a meaningful bullish sign. However, it remained difficult to see the price getting much higher, as there are several resistance levels nearby giving selling pressure, as well as the big round number at $30k and the very strong area of long-term resistance at about $31k.

I was looking for a short trade from a rejection of the confluent trend line of the two price channels which were then dominating the chart.

This opportunity did not set up, but I was correct to be watching for a bullish breakout, and in believing that it would likely be temporary.

We saw the price make a strong breakout yesterday after rebounding very strongly from the 2-month low price near the support level at $28,810, but the price has been selling off from the high which was reached quickly, without being able to get established above the big round number at $30k.

Technically, the position is in a sense mostly unchanged, as the key support and resistance levels are the same, but we have an interesting situation where the former descending price channel received a bullish breakout, but the price has only formed a new descending price channel, so in a sense, despite the bullish breakout – which seems to have failed – nothing has really changed here.

Bitcoin should now be attractive to traders as it has seen an injection of volatility which is likely to continue.

I will be happy to take another short trade from a bearish rejection of $28,681 or a long trade from a bullish rejection of any of the support levels below the current price, especially $29,349.

Concerning the US Dollar, there will be a release of the ADP non-farm employment change forecast at 1:15pm London time.

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