BTC/USD Forex Signal: Short-Term Bullish Momentum

Adam Lemon

$54,400 is likely to be today’s pivotal point.

Last Wednesday’s Bitcoin signals produced a long trade from the bullish bounce at $52,664 which made just a little profit.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $51,634, $50,601, $46,595.
  • Put the stop loss $100 below the local swing low.
  • Adjust the stop loss to break even once the trade is $100 in profit by price.
  • Remove 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to ride.

Short Trade Ideas

  • Short entry after a bullish price action reversal on the H1 time frame following the next touch of $54,398 or $57,334.
  • Put the stop loss $100 above the local swing high.
  • Adjust the stop loss to break even once the trade is $100 in profit by price.
  • Remove 50% of the position as profit when the trade is $100 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 last Wednesday that we had a consolidation pattern between $57,581 and $52,664. I expected this consolidation to continue and these levels to hold over the short term, so I saw the best approach to trade Bitcoin as playing the range and being ready to trade convincing reversals from either of these boundary levels of the consolidation zone.

This was an OK call, as the range held over the 24 hours following my forecast.

The price broke below that lower range, reaching a new 7-week low well below $50k just a few hours, before making a very strong bullish bounce on solid buying which has pushed the price back up as high as $52,900.

We are seeing short-term bullish momentum, which may carry through to higher Bitcoin prices over the day. It looks quite likely that the price will continue to rise to reach the next resistance level identified at $54,398. I think this level is likely to be today’s pivotal point, but I doubt there will be any new, good opportunities for trade entries here today except a short trade from a strong bearish reversal at that level.

BTC/USD

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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