BTC/USD Forex Signal

|

Bitcoin: Deeper bearish retracement

Yesterday’s signals may have triggered a profitable short trade from $8,375 while the bullish price action took place a little way below $7.968.

Today’s BTC/USD Signals

Risk 0.75% per trade.

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

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $7,698 or $7,477.

  •  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

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $8,200 or $8,375.

  • 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.

Advertisement
Great trade opportunities are waiting - don't wait to profit from this pair!
TRADE NOW

BTC/USD Analysis

I wrote yesterday that it looked as if the price was making a bearish retracement, but would probably find support and begin rising again, so I was ready to take a bullish bias if we had gotten a nice bounce at any of the support levels I had identified. Fortunately, there was no such bullish bounce, and the price has continued to fall creating a new lower probable resistance level at $7,947.

With a strengthening USD, it looks as if a deeper bearish pullback is underway. I see the most probable support level where we are likely to get a bullish turn as $7,477 because it is so confluent with $7,500, therefore I would take a bullish bias later if we do get a bounce there.

On the bearish side, it seems we have some momentum and although the technical formation shown in the price chart below is not exactly a valid bearish head and shoulders pattern, it is close to one.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