BTC/USD Forex Signal: Strong Bearish Breakdown

Adam Lemon

BTC/USD: Tested 2-week low price

Last Thursday’s signals were not triggered, as none of the key support or resistance levels identified that day were reached.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Go long after a bullish price action reversal on the H1 time frame following the next touch of $8,162, $8,004, or $7,200.

  • 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

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $8,829, $9,125, or $9,584.

  • 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 I would take a bullish bias once we got two consecutive hourly closes above the recent high price at $9,420. This was a good call as once the price made those higher closes it rose over the rest of the day by approximately another $300 in price.

The technical picture has changed strongly since last Thursday: the price has broken down heavily to reach low prices not seen for the last two weeks. The price action just below $8,829 is very bearish, with a bearish double top formation slowly forming just under that resistance level, suggesting we are about to see another push down. If this level holds, the price is likely to move down to test $8,162 again.

I will take a bearish bias if the price fails to rise above $8,829 or at a bearish reversal at $9,125. I would only take a long trade from a bullish bounce at $8,000 or at $7,200 today.BTCUSDThere is nothing of high importance due today concerning the USD.

About the Author
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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