BTC/USD Forex Signal: Bottoming Above $30k?

Adam Lemon

If $30k breaks down, the price could reach $20k very quickly.

Last Monday’s Bitcoin signals were not triggered, as there was no bearish price action when the key resistance level of $39,048 was first reached.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be entered prior to 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 $33,475, $31,953, $28,607, or $27,487.
  • 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 $37,341, $39,048 or $42,263.
  • 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 Monday that despite recent strong falls and a generally bearish picture, there were signs that we might have seen at least a medium-term double bottom just above the big round number at $35k. I thought that if the price continued to recover for another day or two, we probably would not see a break below $30k for some time.

I was correct about $30k holding for a while if the price continued to recover, and that was a good call. However, the appropriate level to watch is more like $30k than $35k and that has become more apparent due to the recent price action.

We have seen Bitcoin halve in value from its all-time high made only a few weeks ago, and this is significant psychologically. A 50% retracement can be attractive to traders and represent good value. For this reason, we are seeing buying every time the price gets close to $30k which is roughly that 50% level. The area around $30k was also a consolidation zone the last time the price was here.

These factors indicate that we have a pivotal zone at about $30k, and this zone has held as support so far. However, the price action looks at least a little heavy, suggesting that there is danger of $30k breaking down. If it does, the price could reach $20k or lower very quickly, as the price rose from $30k to $30k very quickly without encountering any resistance the last time the price was in this range.

For this reason, I will be happy to take a long-term buy if we get a firm bullish bounce at any of the support levels mentioned above which are higher than $30k. On the other hand, if we get two consecutive hourly closes below $30k today, I will take a bearish bias.

BTC/USD

Regarding the USD, there are no data releases of high importance scheduled for today.

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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