BTC/USD Forex Signal: Double Bottom at $9,000?

Adam Lemon

If the price gets established soon above $9,500, it will then become more likely that we have seen a major bullish reversal from $9,000.

Yesterday’s signals were not triggered, as there was no bullish price action when any of the support levels were reached.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered prior to 5 pm Tokyo time Friday.

Long Trade Ideas

  • Go long after a bullish price action reversal on the H1 time frame following the next touch of $8,136.
  • 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 $9,233, $9,400, or $9,462.
  • 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 the basic outlook technically was still bullish, so I was still interested in taking a long trade from a bullish bounce at any support level. However, this did not work out well at all, with the price falling sharply to the $9,000 area which also acted as an important inflective low point some days ago. This was caused by the switch in market sentiment from risk-on to risk-off, and a risk-off environment tends to boost the U.S. Dollar and depress the relative value of Bitcoin. This is what is happening now.

Technically, over the long-term, we have seen a relatively bullish picture, yet the bulls have been unable to push the price above the very major psychological level at $10,000. This level has been well-defended by sellers of Bitcoin.

There is no key support level near $9,000 but the area seems to have already acted as support and it does represent a medium-term low. Therefore, we may have already seen a medium-term bullish reversal representing a buying opportunity.

I am prepared to take a short trade if we get a bearish reversal quickly at the first resistance level of $9,233. If alternatively, the price gets established soon above $9,500, it will then become more likely that we have seen a major bullish reversal from $9,000.

BTC/USD

There is nothing of high importance scheduled today regarding 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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