BTC/USD Forex Signal: Aggressively Bullish

Adam Lemon

Bitcoin may have further to run over the last few days of 2020 this week, even though it has already made such a huge movement.

Last Wednesday’s signals were not triggered, as the bullish price action took place below the support level identified at $23,255.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be taken prior to 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 $26,012, $25,000, or $24,016.

  • Put the stop loss $100 below the local swing low.

  • Adjust the stop loss to break even once the trade is $100 in profit by price.

  • Remove 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to ride.

Short Trade Idea

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $30,000.

  • Put the stop loss $100 above the local swing high.

  • Adjust the stop loss to break even once the trade is $100 in profit by price.

  • Remove 50% of the position as profit when the trade is $100 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 Wednesday that the price getting established above the former resistance level at $23,255 was a bullish sign. I thought that there were no obvious resistance levels above the price except maybe the all-time high just above $24,000 and the huge major round number and psychological level at $25,000.

This was a good call as the price exploded to the upside over the Christmas holiday, rising by approximately 20% over just a few days to hit a new all-time record high just below $28,500 yesterday before making a deep retracement to the new nearest support level at $26,012.

The situation is clearly bullish, and Bitcoin has made a very strong bullish breakout move over recent days. Technically, it remains bullish as long as the price stays above the support at $26,012. I see Bitcoin as still a good buy if it makes a bullish bounce after pulling back to this level.

Bitcoin may have further to run over the last few days of 2020 this week, even though it has already made such a huge movement. It is important to beware of the extremely high volatility when trading Bitcoin – it is quite possible that we might see a movement either up or down of as much as 20% in a single day.

BTC/USD chart

There is nothing of high importance due today concerning 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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