BTC/USD Forex Signal

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Bitcoin: More bearish but supportive trend line intact

Yesterday’s signals were not triggered, as there was insufficiently bullish price action at $9,801 when it was first reached.

Today’s BTC/USD Signals

Risk 0.75% per trade.

Trades must be taken before 5pm Tokyo time Wednesday.

Long Trade Ideas

  • Go long at a bullish price action reversal on the H1 time frame following the next touch of the ascending trend line shown in the price chart below currently sitting at about $9,567 or the horizontal level at $9,073.

  • Put 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 $9,833 or $10,062.

  • Put 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 the price chart was dominated by the long-term bearish trend line which was suppressing the price. I was ready to take a bearish bias later if we had gotten two consecutive hourly closes below the strong support at $9,801, as the larger technical picture was suggesting a breakdown. This was a good call as that level did break down, and the price is currently about $75 per coin lower than the entry point given yesterday for a short trade.

The picture is more bearish, with a formerly supportive area flipping to become new resistance at $9,833. However, there is a long-term bullish trend line below and an inflective area which has seen buying recently, and these may prevent much of a further fall, so bears need to be careful.

I would take a bearish bias today if we get two consecutive hourly closes below $9,500 later today.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.
Learn more from Adam in his free lessons at FX Academy.