BTC/USD Forex Signal: Consolidating Triangle

Adam Lemon

Price action looks messy and hard to predict.

Last Monday’s Bitcoin signals were not triggered as there was no bullish price action when the support level at $33,973 was first reached.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be entered prior to 5pm Tokyo time Wednesday.

Long Trade Idea

  • Go long after a bullish price action reversal on the H1 time frame following the next touch of $32,438.
  • 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

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $35,258 or $37,198.
  • 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 a sustained break below $32,438 would certainly be a bearish sign, but we seemed to get buying every time the price reached that area I have been expecting for some weeks now that we will eventually see such a breakdown, but every time it came close, buyers stepped in and held up the price of Bitcoin. So, it seems that there are still plenty of people who see it cheap close to $30k.

This was an OK call in the sense that $32,438 has continued to hold as a pivotal point.

The technical picture now is dominated by the narrowing consolidating triangle shown in the price chart below. Until the price gets established either above $35,600 (the current level of the upper trend line of the triangle) or below $32,438, the price is likely to continue ranging within this area, which could give opportunities to trade reversals within this area.

I am somewhat discouraged over trading Bitcoin right now because the price has been going sideways within this rough price area for some time and is looking less and less likely to break out of it.

I see the best approach today as to trade reversals from the extremes mentioned above. For bulls, it may be best to stand aside until the price gets established above $35,600 or even a little higher.

BTC/USD

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

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