BTC/USD Forex Signal: Bullish Consolidation Below $20k

Adam Lemon

Short-term traders might look to get long at any bullish bounce at a key support level.

Yesterday’s signals were not triggered, as none of the key levels identified were reached yet.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be taken prior to 5pm Tokyo time Thursday.

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $18,976, $18,659, or $18,275.

  • 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

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $19,977 or $20,000.

  • 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 yesterday that we were seeing a consolidation with a slight bullish bias, so the technical picture remained bullish but somewhat muted so far.

I thought that the best approach would be to wait and see if the price reached either of the two nearest support levels and how it reacts there, and that a bullish bounce at $18,976 was probably going to be a better long trade than a bullish bounce at $18,659. However, I saw an even better approach as waiting for a daily New York close above the big round number at $20,000.

This was an OK call, and the price has just consolidated bullishly for another day, inching higher and making the technical picture just that little bit more bullish. The lower support level at $18,659 is looking more attractive as it is now very confluent with the broken descending trend line which is shown within the price chart below.

I will wait for a daily close above $20,000 to go long but short-term traders might look to get long at any bullish bounce at a key support level. I would not look to take any short trade in Bitcoin today.

Bitcoin is in a pivotal zone and it is worth keeping a close eye on as we head towards 2021.

BTC/USD

Concerning the USD, there will be a release of retail sales data at 1:30pm London time, followed by flash manufacturing at 2:45pm, then FOMC cconomic projections, statement, and federal funds rate at 7pm followed by the usual press conference half an hour later.

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

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.