BTC/USD Forex Signal: Consolidating below $7,228

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BTC/USD: Volatility decreasing 

Yesterday’s signals were not triggered, as none of the key levels were reached.

Today’s BTC/USD Signals

Risk 0.50% 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 $6,418, $6,089, or $5,683.

  • 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 entry after a bearish price action reversal on the H1 time frame following the next touch of $7,228, $7,670 or $8,004.

  • 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 yesterday that the $2 trillion U.S. rescue package has helped hold up the Bitcoin price, but how long that improvement will last is a good question – I think not for very long, although I was ready to take either a long or short trade yesterday. I was on the right track as the price has continued to consolidate without hitting either of the nearby support or resistance levels. Volatility is also decreasing notably as markets generally are starting to calm down, at least relatively.

I think a neutral approach should continue here today with no directional bias – so I would take either a long trade at a bounce from $6,418 or a short trade from a bearish reversal at $7,228.BTCUSDRegarding the USD, there will be a release of Unemployment Claims data at 12:30pm London time.

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