BTC/USD Forex Signal: Bulls May be Breaking $40k

Adam Lemon

Bitcoin is very bullish above $42,263.

Last Monday’s Bitcoin signals were not triggered as there was no sufficient price action when support and resistance levels were first reached to justify a trade entry.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $38,799, $37,633, or $36,656.

  • 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 bearish 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 Monday that we had seen a strong rise by Bitcoin of approximately 10% in value to hit a 1-month high price just below $40k, in just a few hours. I saw this as a bullish sign. However, I thought that this upwards thrust may be done for the time being, seeing $40k as a pivotal point, but I remained interested in buying a dip.

This was a good call, as the price failed again at $40k so the level did turn out to be pivotal. The price also went on to make a bullish bounce following a dip and at the time of writing is now challenging the round number at $40k again.

There is always a lot of excitement around Bitcoin when it breaks to new high prices even if such highs are only medium-term, as is the case here today, and this can cause strong rallies which makes the case for a bullish approach to Bitcoin today. However, the price needs to get established above $40k and the key resistance level above that at $42,263 before it will really be able to take off.

There is plenty of room for Bitcoin to rise all the way to $46,595 after it breaks $42,263. The line of least resistance is certainly upwards, as we have several support levels not far below the current price area.

I will take a bullish bias if we get two consecutive higher hourly closes today above $40,600 or if we get a bullish bounce at $38,800.

BTC/USD

Concerning the USD, the FOMC will release its statement and federal funds rate at 7pm 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

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.