BTC/USD Forex Signal: Bitcoin Collapsing? - 16 March 2020

BTC/USD: No real lower limit below $4,116

Last Thursday’s signals were not triggered, as there was no bullish price action when the price reached the support levels identified at $7,228 and $6,793.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 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 $4,116 or $3,000.

  • Put the stop loss $50 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

  • Short after a bearish price action reversal on the H1 time frame following the next touch of $4,912 or $5,937.

  • Put the stop loss $50 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.

BTC/USD Analysis

I wrote last Thursday that the strong risk-off moves in financial markets had hit Bitcoin and were likely to continue to do so. Therefore, I took a bearish bias on Bitcoin. This was an excellent call as the price almost halved in value within a day!

In times of extreme market panic, we see Bitcoin is exposed as a “luxury” asset that bears little relation to anything tangible. Bitcoin bulls have been made to look extremely foolish.

We do however see a key support level at $4,116, which could well produce a double bottom even if over the short-term.

I take a bearish bias here below $4,000 but only as far as the support level at $3,000. If the price can get established below $3,000 then Bitcoin could collapse exponentially.BTCUSDThere is nothing of high importance scheduled for release today regarding the USD.

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.