BTC/USD Forex Signal: Bulls Threaten $20k

Adam Lemon

The best approach overall for bulls is to wait for a daily (New York) close above $20,000 before entering any new long trades.

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

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 5pm Tokyo time Wednesday.

Long Trade Ideas

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

  • 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

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $19,977 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 the upwards price movement and break up above the descending bearish trend line (which is still shown in the price chart below) had created a more bullish technical picture. I therefore saw the key thing to watch for as whether the price would now remain above the nearby key support levels at $18,976 and $18,659.

This was an OK call as the price is mostly unchanged over the past 24 hours with a slight bullish bias, as it was trading a bit higher for a while. The nearest support level has not even been touched, so the technical picture remains bullish but somewhat muted so far.

It is logical to wait and see if the price reaches either of the two nearest support levels and how it reacts there. A bullish bounce at $18,976 is probably going to be a better long trade than a bullish bounce at $18,659.

I think the best approach overall for bulls is to wait for a daily (New York) close above $20,000 before entering any new long trades, as a breakout beyond this level is likely to face considerable resistance, so it is possible there will be several failing bullish thrusts from the current price area.

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

BTC/USDThere 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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