BTC/USD Forex Signal: Consolidating - 3 February 2020

Adam Lemon

BTC/USD: Remains bullish above support at $9,141

Last Thursday’s signals produced a long trade from the bullish pin bar which rejected the support level identified at $9,190 but this trade hasn’t really gone anywhere yet. It would probably be worth cutting at least part of the small floating loss although the price remains technically bullish above $9,141.

Today’s BTC/USD Signals

Risk 0.75% per trade.

Trades must be entered prior to 5pm Tokyo time Tuesday.

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $9,190, $9,141, or $8,802.

  • 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.

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.

BTC/USD Analysis

I wrote last Thursday that the price was now showing a bullish consolidation pattern. Due to the strength of the recent bullish move, this was a bullish sign, but it would make sense to only take a long bias and enter a long trade following a bullish bounce at $9,190 or following two consecutive hourly closes above the resistance level at $9,489 later.

This was a fairly good call as there was a bullish bounce later that day at $9,190 from a pin candlestick which rejected that level and produced a rise in the price. This trade would still be open but going nowhere as this bullish consolidation has been continuing ever since.

I maintain a weak bullish bias, but it is looking more likely that the support level at $9,141 while pivotal will break down. I would take a bullish bias if we get a bounce at $9,141 but expect a deeper retracement if we get a couple of consecutive hourly closes below that pivotal point.

On the bullish side, the price would have plenty of room to rise, with no key resistance until the big round number at $10,000 at the earliest.BTCUSDConcerning the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.

Adam Lemon

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

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