BTC/USD Forex Signal: Bullish Recovery

The bullish rise really seems to have run out of steam at the area of resistance between $18,674 and $18,882, where we now see early signs of a bearish reversal that may well be giving a short trade opportunity right now.

Last Thursday’s signals were not triggered, although the low of the day was very close to the support level identified at $16,173.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be taken before 5pm Tokyo time Tuesday.

Long Trade Ideas

  • Go long after a bullish price action reversal on the H1 time frame following the next touch of $18,330, $17,900, $17,537, or $17,078.

  • 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.

  • 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 $18,674, $18,882, or $19,977.

  • 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.

  • 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 last Thursday that the price had made a sharp and significant downwards movement after falling from a recent long-term high price. I thought that the meaningful bullish movement would be over for a while at least, and I wanted the price to fall further before looking for a new long trade as I thought the buying opportunity would come at the support level identified at $15,507 because it was near a major round number and also it marked the start of a cluster of support levels which seemed technically likely to act together as effective support.

It seems this may not have been a very good call, as the price found what seems to be a solid bottom just above a higher support level, the one at $16,173. However, after rising firmly from there, the bullish rise really seems to have run out of steam at the area of resistance between $18,674 and $18,882, where we now see early signs of a bearish reversal that may well be giving a short trade opportunity right now.

I take a cautious bearish bias right now but would monitor any trade carefully on short-term time frames, as there are several support levels which may well halt the downwards movement. On the other hand, if the price does get established above $18,882 later, that will be a bullish sign suggesting we may see a test of the all-time high price just below $20,000.

BTC/USD

There is nothing of high importance due 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.