BTC/USD Forex Signal: Bulls in Doubt

Adam Lemon

Bitcoin is losing its attractiveness as a risk-on investment, with stocks and gold rising dramatically over recent weeks while Bitcoin cannot even break $10,000.

BTC/USD: Price back below pivotal point at $9,331

Yesterday’s signals were not triggered as there was insufficiently bearish price action when the resistance level at $9,352 was first reached.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Go long after a bullish price action reversal on the H1 time frame following the next touch of $9,284 or $9,142.
  • 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 $9,331 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 that I would want to take a bullish bias today if we got two consecutive hourly closes above that $9,352.

This has not worked out very well, as we did get such a long trade entry signal, but the price is now lower after we saw a rise of only about $100. The price is not very much lower, but a worrying sign for bulls is the price is now below an obvious new resistance level at $9,331.

Despite that, over everything but the short-term, the picture is still at least a little bullish, with wide ascending price channels still dominant in the chart shown below.

The USD is weak, which helps the bullish case here.

Overall, it has to be said that although Bitcoin tends to rise as risk-on sentiment rises in the market, we are seeing less of an impact show in Bitcoin, while more established assets such as Gold and the Euro have risen more firmly, and to new highs.

This suggests that Bitcoin is losing its attractiveness as a risk-on investment, with stocks and gold rising dramatically over recent weeks while Bitcoin cannot even break $10,000.

In view of this analysis, I will only want to be taking long positions in Bitcoin either at firm bullish bounce near $9,000 or following a bullish breakout above the psychologically important round number at $10,000.

I will take a bearish bias below $9,000 as a breakdown below that level would be likely to trigger a stronger downwards movement.

BTC/USD

There is nothing of high importance scheduled 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.
Learn more from Adam in his free lessons at FX Academy

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