BTC/USD Forex Signal

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Bitcoin: Bearish price channel

Yesterday’s signals produced a nicely profitable short trade from the bearish rejection of the resistance level at $8,154.

Today’s BTC/USD Signals

Risk 0.75% per trade.

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

Long Trade Ideas

⦁ Go long after a bullish price action reversal on the H1 time frame following the next touch of $7,754 or $7,202. 

⦁ Place 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

⦁ Go short after a bearish price action reversal on the H1 time frame following the next touch of $8,154, $8,375 or $8,703.

⦁ Place 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 yesterday that the price movement had created a new lower “stairstep” resistance level at $8,154. This could again provide a great short trade entry opportunity. This was a good call, as it did so, and the price has continued to move down in an orderly bearish way, with the bearish channel holding firmly and cleanly.

I also noted yesterday that the nearest support level shown in the chart at $7,754 could become a very interesting entry point for long-term buyers, due to its confluence with the lower channel trend line and the psychological quarter-level at $7,750. The confluence is even stronger today and this level is certainly in play as a possible entry point for long-term buyers. Anyone holding a short trade should seriously consider taking at least partial profits in the $7,754 area.

A sustained break below $7,754 would be a very bearish sign if it happens.BTCUSDThere is nothing of high importance due today concerning the USD.

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy