BTC/USD Forex Signal: Rejects $50k

Adam Lemon

$46,595 is likely to be today’s pivotal point.

Last Monday’s BTC/USD signal produced a profitable trade from the bullish bounce at the nearest support level at $48,746.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Go long after a bullish price action reversal on the H1 time frame following the next touch of $47,443 or $46,595.

  • 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

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $48,746 or $49,835.

  • 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 lot of bullish momentum in Bitcoin during the month of August so far, which had pushed the price above the big psychological round number at $50k.

I said that I preferred to look for a long trade here in Bitcoin, singling out the support at $48,746 as looking more likely to be reliable. This was a good call as we did get a bullish bounce there.

The technical picture has changed since Monday, with Bitcoin unable to hold up above $50k and falling in an orderly way with clear lower lows and lower highs. This bearish price action has also printed a couple of new resistance levels overhead.

Despite this, there is probably some residual bullish momentum ready to kick in again at some point when the price retraces enough of buyers to re-enter in a major way.

I see today’s pivotal point as likely to be the support level I have identified at $46,595, as the price has at the time of writing already broken down below $47,443. I am prepared to take a long trade from a bullish bounce off $46,595 if it sets up later today. If the price gets established below that level, it has room to fall quickly to as low as $44,000 so there may be a chance for short-term traders to exploit the short side if that happens, as an alternative scenario.

BTC/USD

There is nothing of high importance scheduled today concerning the USD or Bitcoin.

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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