BTC/USD Forex Signal: Consolidation Between $8,162 and $9,125

Adam Lemon

BTC/USD: Support holding

 

Yesterday’s signals produced a profitable short trade from the bearish pin bar candlestick which rejected the resistance level identified at $9,125.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

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

  • Place the stop loss $50 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 $8,829, $9,125, or $9,584.

  • Place the stop loss $50 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.

BTC/USD Analysis

I wrote yesterday that I would take a bearish bias if the price failed to rise above $8,829 or at a bearish reversal at $9,125. I was only prepared to take a long trade from a bullish bounce at $8,000 or at $7,200.

This was a good call, as the primary move of the day was downwards after a failure at the resistance level of $9,125 so the signal was able to secure a profitable short trade.

Interestingly, although there has been movement beyond yesterday’s levels, all the levels from yesterday remain intact as key support and resistance points as the wide consolidation pattern continues here.

There is still resistance at $8,829 but I would be very careful about trusting this level enough to use it to trigger a short trade entry.

Today I am be prepared to take either a long trade from a bounce at $8,162 or a short trade from another bearish reversal at $9,125.BTCUSDRegarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time.

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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