BTC/USD Forex Signal: Price Bullish Above $26,012

Adam Lemon

We see an early sign with this weak bounce that the price may be more likely to break below $26,012 and make a deeper bearish retracement. 

Yesterday’s signals were not triggered, as the bullish price action at the support level identified at $20,016 which happened a few hours ago was not strong enough to trigger a long trade entry.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 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 $26,012, $25,000, or $24,016.

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

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

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

Short Trade Idea

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

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

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

  • Take off 50% of the position as profit when the trade is $100 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 technically, Bitcoin remains bullish as long as the price stays above the support at $26,012. I saw Bitcoin as still a good buy if it makes a bullish bounce after pulling back to this level.

I was correct to identify this level as pivotal – Bitcoin tends to respect technical levels even more so than Forex currency pairs do. We have seen another pullback over the past days with short-term bearish price action, but also a weak bounce a few hours ago at $26,012 which has not been quite enough to give a convincing buy signal.

We see an early sign with this weak bounce that the price may be more likely to break below $26,012 and make a deeper bearish retracement. However, it is worth waiting for the level to be decisively broken before giving up on a new long trade entry, as the odds look to still be weakly with the bulls as of this writing.

I am ready to take a long trade if we get a firmer bullish bounce after another touch of $26,012 due to the strong, long-term bullish trend and absence of any obvious key resistance levels above before $30,000 is reached. However, two consecutive hourly closes below $26,012 would make a continuing retracement to the next support level at $25,000 much more likely, and I would also be prepared to buy at a bounce from that level as it is such a big round number and likely to be significant.

BTC/USD chart

There is nothing of high importance scheduled 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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