BTC/USD Forex Signal: Bitcoin Recovers

Adam Lemon

$47,532 will form either a bullish breakout or a bearish double top.

Last Monday’s BTC/USD signal produced a nicely profitable long trade from the bullish bounce at the key support level identified at $43,836.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 5pm Tokyo time Thursday.

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $46,867, $46,381, or $43,836.

  • 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 Idea

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $47,532, $48,065, or $49,161.

  • 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 the picture looked bearish, but bears had a big hurdle in their way – the very strong support level at $43,836 which looked likely to produce some minor bullish moves before it eventually breaks down. I thought that scalping long trades from bullish bounces off $43,836 were unlikely to pay off.

I was correct about the importance of the horizontal level at $43,836 but I was wrong about direction – the level held firmly and produced a bullish inside bar break which has sent the price up to the key resistance level at $47,532. This has halted the advance over recent hours and the big question now is whether this resistance level will hold and produce a bearish double top formation or be overcome by the price which would then advance to new multi-week highs.

If the price breaks down below $46,171 that will be a bearish sign.

I will be ready to enter a short trade if we get a firm rejection of the resistance level at $47,532 later today.

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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