BTC/USD Forex Signal: Volatile Climax Above $11,000

Adam Lemon

The price rose strongly yesterday before making a volatile bullish climax, very similar to what was also seen with silver and gold in USD terms.

BTC/USD: Bullish move has probably peaked for now

Yesterday’s signals produced an excellent, profitable long trade from the bullish doji candlestick which rejected the support level identified at $10,123.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $10,696, $10,456, $10,123 or $10,039.
  • 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 $10,985.
  • 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 be very happy to take a long trade from a bullish bounce at either of the support levels I identified above $10,000. This was a great call as the price retraced to the support level at $10,123 to the pip before making a bullish reversal there and producing an excellent long trade which gave multiple times the risk as a potential reward.

The price rose strongly yesterday before making a volatile bullish climax, very similar to what was also seen with silver and gold in USD terms.

The price has pulled back quite deeply which is not a surprise due to the high volatility. Usually, these climaxes mean we will not see higher prices beyond yesterday’s peak for at least a few days, suggesting that the best opportunity today is likely to be on the short side.

Therefore, I am prepared to take a short trade today from a bearish reversal at $10,985, although I do not have very high confidence in the level itself, so a wider than normal stop-loss adjusted for volatility might be helpful in such a trade.

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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