BTC/USD Forex Signal

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Bitcoin: consolidating below 1-year high near $9k

Last Thursday’s signals produced a profitable short trade from the large bearish outside candlestick on the hourly chart which clearly rejected the resistance level at $9,003.

Today’s BTC/USD Signals

Risk 0.75% per trade.

Trades must be entered prior to 5pm Tokyo time Tuesday.

Long Trades

  • Long entry at a bullish price action reversal on the H1 time frame following the next touch of $8,451, $8,153 or $7,830.

  • Put the stop loss 1 pip below the local swing low.

  • Move the stop loss to break even once the trade is $50 in profit by price.

  • Remove 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to run.

Short Trades

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $8,610, $8,893 or $9.003.

  • Put the stop loss 1 pip above the local swing high.

  • Move the stop loss to break even once the trade is $50 in profit by price.

  • Remove 50% of the position as profit when the trade is $50 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.

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BTC/USD Analysis

I wrote last Thursday that there was going to be no change to the technical picture until the price broke one of the nearby support or resistance levels. My preference was for a long trade entry following a strong bounce at the nearby support – I was ready take a bullish bias if that happens, in line with the long-term bullish trend.

We got just the opposite – a very strong bearish bounce from a big rejection of both the round number at $9,000 and the horizontal resistance level at $9,003 as soon as this new 1-year high was made. The price recovered from the subsequent low and printed a crucial new flipped support level at $8,153. However, the lower high at about $8,800 and the new lower resistance at $8,610 are bearish signs. Bulls should remain encouraged but should be cautious due to this deep pull back. Overall, the odds will still tend to favour the bulls though.BTCUSDRegarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.