BTC/USD Forex Signal: Weakly Bullish Consolidation

Adam Lemon

BTC/USD: Strong support at $10,557 

Yesterday’s signals may have produced a profitable short trade from the bearish reversal which took place just a fraction above the resistance level I identified at $10,833.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be entered before 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 $10,557, $10,421, or $10,351.
  • Put 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.
  • 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 run.

Short Trade Ideas

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $10,841 or $11,023.
  • Put 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.
  • 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 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 although we have seen the big round number at $10,000 continue to hold and make itself felt as support 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.

I saw Bitcoin as still a good long-term buy at $10,000 or at a slightly lower price than $10,000.

This was an OK call as the price has gone sideways over the past day, with the nearest resistance level holding after just a very small readjustment.

The picture remains weakly bullish with the big story being long-term buying at or near the big round number at $10,000.

We have some short-term bearish momentum but a lot of support at or just above the support level identified at $10,557. I will be happy to take a long trade later if we get a bullish bounce as soon as we see a touch of that level.

BTC/USD

Regarding the USD, there will be a release of ADP Non-Farm Employment Change data at 1:15 pm London time followed 15 minutes later by Final GDP numbers.

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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