BTC/USD Forex Signal

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Bitcoin: Consolidating triangle

Yesterday’s signals were not triggered, as neither of the key levels were ever reached.

Today’s BTC/USD Signals

Risk 0.75% per trade.

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

Long Trade Idea

  • Go long at a bullish price action reversal on the H1 time frame following the next touch of $9,073.

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

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

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

Short Trade Ideas

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $10,562 $10,921, or $11,112.

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

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

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

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BTC/USD Analysis

I wrote yesterday that as the price was contained within a dubious consolidating triangle, and as the resistance at $10,562 was holding very firm, I saw bulls and bears as evenly matched, so I wanted to stand aside from trading Bitcoin yesterday. This was a good call as the price did little, with neither the bulls nor the bears managing to get any more advantage or success in pushing the price in a desired direction.

I now see the triangle as having more significance as it continues to hold, and also reach a much narrower point which will soon require a breakout. It is theoretically possible to draw more horizontal support and resistance levels near the current price, but probably pointless.

Overall, the signs are pointing to a breakdown of this triangle, so I see the opportunity today as a potential short trade once we get a sustained break below the psychological level at $10,000 which is confluent with the bottom border of the triangle, as can be seen in the price chart below.BTCUSDRegarding the USD, there will be a release of CB Consumer Confidence 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.