BTC/USD Forex Signal: New Highs Above $50k

Adam Lemon

A bullish trend has pushed Bitcoin to new 3-month high.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be taken before 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 $48,746, $48,061, or $46,595.

  • 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

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $51,364 or $54,864.

  • 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

Bitcoin really turned around over the month of August after moving down in a long-term bearish trend for quite a while. I had thought towards the end of July that we were likely to see a major bearish breakdown in Bitcoin below $30k which would have seen the price fall to $20k or even $10k but the bulls defended $30k effectively. Over the last four weeks we have seen Bitcoin rise steadily from the $30k area and now, finally, it is trading above $50k which is psychologically important, representing a value increase of approximately 66% within this short time.

Technically there is nothing special to note about the bullishness except to say that the price has only just breached $50k and not by much, so it may need a bearish pullback before the price can make another upwards thrust.

I will certainly be looking for a long trade here in Bitcoin, but an attractive entry point looks somewhat unclear. The inflective point at about $49,750 might work, but the support at $48,746 looks more likely to be reliable. I will take a long trade if we get a bullish bounce at either of the two nearby support levels following a bearish retracement.

It is interesting and possibly significant that while risk currencies have lost a lot of ground against the U.S. dollar recently, Bitcoin – which is arguably a very risky asset – has advanced strongly. This is a bullish hint that Bitcoin has a lot of buoyancy and won’t break down in a way that sees it lose most of its value.

BTC/USD

Concerning the USD, there will be releases of Flash Manufacturing and Services PMI data at 2:45pm 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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