BTC/USD Forex Signal: Short-Term Bullish Bounce

Adam Lemon

Long-term low at $28,607 in sight.

Last Wednesday’s Bitcoin signals were not triggered, as none of the key identified support or resistance levels were reached that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Idea

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $28,607.

  • 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 $31,015, $32,319, or $32,817.

  • 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 there were no key support levels below the current price until $28,607, which was likely to be an extremely pivotal level. If this broke down, I thought that the price of Bitcoin could fall very quickly to $20k or even $10k.

I was looking for a short entry either from a bearish reversal after a retracement to $32,817, or maybe after two consecutive lower hourly closes below the lower trend line of the bearish price channel which currently sits at about $31,547.

This was a great call as $31,547 held, so my approach would have kept intended bears away from a losing short trade. However, I was correct to be looking in the short direction overall, as we have seen the price fall lower over the past week.

Although recent hours have seen a short-term bearish rebound, the technical picture is still very bearish, and the threat of a massive breakdown once the price gets established below that pivotal support level at $28,607 is very real.

I think the best approach here will be either to enter a short trade following two consecutive lower hourly closes below $28,607 or from a bearish reversal from $31,015 if it is reached, which also looks likely to be an important level.BTC/USD

There is nothing of high importance scheduled today regarding 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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