BTC/USD Forex Signal: Threatening to Break Above $40k

Adam Lemon

The price has room to rise beyond $42k without hitting key resistance.

Last Wednesday’s Bitcoin signals were not triggered, as there was no bearish price action when either of the two key resistance levels were first reached that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be taken 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 $38,332, $37,540, $36,279, or $36,641.
  • 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

  • Short entry after a bullish price action reversal on the H1 time frame following the next touch of $42,263 or $46,595.
  • 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 Wednesday that as I saw the area close to $30k as an important pivotal point for a long time, and as the price was beginning to rise from that area, I was happy to take a long trade if we had gotten a bullish bounce at $32,432, or if we had gotten two consecutive lower hourly closes below $30,000.

This was a good call, although none of my identified key support levels were retested that day, so my plan did not give an entry opportunity. However, the price continued to advance over the day with firm bullish momentum, so I was correct to see this bounce near $30k as technically significant.

The price has continued to rise to a new 2-week high after making a bearish retracement at the end of last week, and it is now standing very close to $40k after having invalidated a key resistance area near that level. We see a pause in the advance, but it looks likely that the price can quite easily make a further meaningful advance once it manages to get past $40k.

I am generally bullish on Bitcoin since $30k held, and I will be happy to enter a long trade today if we get two consecutive higher hourly closes above $40k today, or if we get a strong bullish bounce at any of the support levels I listed above. I will target the next resistance level at $42,263 as a take-profit level.

I will not take any short trades in Bitcoin today.

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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