BTC/USD Forex Signal: Bullish Momentum Slowing

Adam Lemon

Bulls need to hold the support level at $54,400.

Last Monday’s Bitcoin signals produced a short trade from the bearish reversal at the resistance level identified at $54,398, but the overall profit was quite small.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be taken before 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 $54,398, $52,664, $51,364, or $50,601.
  • 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 Ideas

  • Go short after a bullish price action reversal on the H1 time frame following the next touch of or $57,334, $58,450, or $59,280.
  • 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 we were seeing short-term bullish momentum which may carry through to higher Bitcoin prices over the day. I thought that it looked quite likely that the price would continue to rise to reach the next resistance level identified at $54,398.

This was a good call, as the price rose steadily higher throughout Monday before peaking at that resistance level.

Although the price has broken above a few resistance levels and flipped them cleanly into new probable support – which is a bullish sign – it now seems as if the bullish momentum is slowing down as the price reaches an earlier comfort zone between roughly $54k and $57k.

The first thing to watch for now is likely to be whether the nearest support level (identified at $54,398) holds or breaks down. If it holds, that will be a bullish sign, but as the price is in a comfort zone, it may well struggle to get much higher than $56k.

Bitcoin looks likely to be a good buy if there will be a strong bounce at any support level, but a short trade from $57,334 in the unlikely event that this price is reached later today also looks attractive.

If the price can get established above $57,500 later that will be a very bullish sign.

BTC/USD

Regarding the USD, there will be a release of the FOMC 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

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