BTC/USD Forex Signal

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Bitcoin: Bulls and bears are evenly balanced

Last Thursday’s signals were not triggered, as there was no bearish price action when $10,270 was reached.

Today’s BTC/USD Signals

Risk 0.75% per trade.

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

Long Trade Idea

  • Long entry at a bullish price action reversal on the H1 time frame following the next touch of $9,073.
  • 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 Trade Ideas

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $10,562 $10,921, or $11,112.
  • 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 the picture was essentially bearish, without any very clearly defined support level until $9,073. However, there were some bullish inflection points close by which could hold up the price, so I was not optimistic about a further fall.

This was a good cautious call as the price actually rose over the course of that day, despite the larger bearish pattern which dominated the price chart that day.

The technical picture remains confused, as although we had a bullish break of a long-term bearish trend line, there is another obvious trend line which is holding the price. However, there is still buying below $10,000 and a new bullish trend line has formed there, leaving us with a dominant consolidating triangle which does not look very reliable as it is not symmetrical. Additionally, the resistance at $10,562 is holding very firm.

It seems overall the bulls and bears are evenly matched, so I would stand aside from trading Bitcoin today and wait for a clearer technical picture to emerge.

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Regarding the USD, there will be a release of Core Durable Goods Orders at 1:30pm 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.
Learn more from Adam in his free lessons at FX Academy.