BTC/USD Forex Signal: Bullish Above $45K

Adam Lemon

There may be possible profit-taking at $50K if it is reached later.

Last Monday’s signals were not triggered, as there was no bearish price action at the resistance level identified at $39,717 that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Go long after a bullish price action reversal on the H1 time frame following the next touch of $44,898 or $41,021.

  • 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 $50,000.

  • 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 last Monday that after peaking just below $41K on Saturday, the price had printed new lower resistance at $39,717 and was consolidating below there. This level looked very likely to be the day’s pivotal point, so if we got two consecutive hourly closes above it, I was ready to take a bullish bias on Bitcoin for the day.

This was a great call, as coincidentally, that resistance level held until news broke of Tesla’s purchase of $1.5 billion of Bitcoin which send the price higher by 11% in just an hour. This produced a long trade entry an hour later at about $43,000 and at the time of writing, the price is up about 7% from there, so this should have been a nicely profitable trade signal.

The price peaked about 24 hours ago at the all-time high of $48,178. We have seen a bearish retracement, but it is nothing out of the ordinary and does not threaten the basically very bullish technical picture we see right now. Bitcoin is the subject of a lot of bullish speculative interest at present and the odds should be in favour of still higher prices due to the “blue sky” above, but the big round number at $50k could act as resistance, as could yesterday’s high price.

I see Bitcoin remaining an interesting short-term buy if we get two consecutive hourly closes later today above $50,000 or if we get a bullish bounce between $44,900 and $45,000.

A sustained bearish breakdown below $44,000 could see a rapid downwards movement resulting.

BTC/USD chart

Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm London time.

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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