BTC/USD Forex Signal: Wide Bearish Price Channel Emerging

Adam Lemon

Volatility has declined significantly.

Last Wednesday’s Bitcoin signals were not triggered as there was no bullish price action during the period specified when the price reached the support level identified at $32,438.

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 $34,110, $33,663, $33,260, or $32,438.
  • 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 $34,513 or $35,258.
  • 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 until the price got established either above $35,600 or below $32,438, the price was likely to continue ranging within this area, which could give opportunities to trade reversals.

This was a great call as the price has remained within this range ever since.

The technical picture has shifted subtly but significantly, as the consolidating triangle of last week has become a wide bearish price channel.

However, bears should not get overly excited about this, as there are many support levels below the current price within the channel, meaning that the price is likely to have difficulty in moving down smoothly.

Due to the bearish channel, there could either be a good opportunity to go short from a bearish reversal at either of the nearby support levels I identified above, or long following two consecutive hourly closes above $35,258. I prefer the long trade if it sets up.

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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