BTC/USD Forex Signal: Bulls Hit Record High

Adam Lemon

It may be that Bitcoin fails at or near $20,000 and gives an opportunity for a medium to long-term short trade, so it is worth keeping an eye out for either a long or short trade.

Yesterday’s signals produced a nicely profitable long trade from the bullish bounce at the support level identified at $18,300. Any remainder of this position is probably best exited for profit now as the price is looking less likely to travel much higher over the short term.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered prior to 5pm Tokyo time Wednesday.

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $18,882, $18,674, $18,330, or $17,900.

  • Put 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 $19,864 or $20,000.

  • Put 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 yesterday that as the bullish rise really seemed to have run out of steam in the area of resistance between $18,674 and $18,882, I took a cautious bearish bias but would monitor any trade carefully on short-term time frames. However, I also thought that if the price did get established above $18,882 later, that would be a bullish sign suggesting we may see a test of the all-time high price just below $20,000.

This was a good call as the price only continued down as far as the next support level during the initial bearish move, so hopefully the short-term time frame reversal seen there would have been enough to give an exit from a short trade without loss. Later, the bullish break above $18,882 could have produced a profitable long trade entry which could have been ridden up to the all-time high which was tested yesterday as I predicted.

The price just got a tiny fraction higher than the previous all-time high price before pulling back, so as anticipated, there is resistance there. We are now seeing a short-term consolidation between that high and the likely new highest support level at $18,882. Although we may get a new all-time high today and maybe even a break above the huge round number at $20,000, this feels unlikely.

It may be best to stand aside and wait for the price to get established above $20,000 before entering any new long trades, although committed trend traders may wish to look for a long entry following a pullback to $18,882 and a bullish bounce there if it sets up. I prefer looking for a new long trade following any strong bullish breakout above $20,000. It may be that Bitcoin fails at or near $20,000 and gives an opportunity for a medium to long-term short trade, so it is worth keeping an eye out for either a long or short trade.

BTC/USDRegarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time when the Chair of the Federal Reserve will also begin testifying before Congress.

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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