BTC/USD Forex Signal: Medium-Term Consolidation

Adam Lemon

BTC/USD: Centre of gravity at $10,700 

Last Thursday’s signals were not triggered, as there was insufficiently bearish price action at any of the three resistance levels which were reached that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be taken 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 $10,557, $10,421, or $10,351.
  • Place 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.
  • Remove 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

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $10,833, or $11,023.
  • Place 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.
  • Remove 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 long-term buys from support at or below $10,000 looked like the best potential opportunity here. This was a relatively OK call although the low that was made the day of my forecast was a little above $10,000, from where the price has risen over the past few days.

The technical picture is somewhat bullish insofar as the big round number at $10,000 continues to hold and make itself felt as support. However, there is no doubt that we have also seen a sequence of lower major swing lows over the past 10 days or so, which is a sign of a longer-term consolidation.

Overall, I think Bitcoin remains a good long-term buy at $10,000 or at a slightly lower price than $10,000.

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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