BTC/USD Forex Signal: Medium-Term Bearish Price Channel

Adam Lemon

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

 

Last Monday’s BTC/USD signal was not triggered as the bullish price action took place below the only support level which was reached.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be taken 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 $46,595 or $43,836.

  • 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 $48,675 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 Bitcoin was slowly turning more bearish as it could not get above $50k and support levels were providing bullish bounces but only over the short-term.

I thought that if the price broke below $46,595 it would be likely to fall quite quickly to $43,836.

This was a good call as the price has continued to move down slowly since then, forming a symmetrical bearish price channel which is shown in the price chart below. I was also correct about the importance of the support level at $46,595 which has continued to hold as firm support.

There is therefore little change to the technical picture from Monday, with any bearish breakdown below $46,595 looking likely to be significant as it will probably trigger a fast additional bearish movement. The price channel supports this.

Longer-term traders are probably best advised to wait for such a breakdown before taking a short trade, while scalpers could find a good long trade opportunity from a bullish bounce from a retest of the support level at $46,595.

BTC/USD

Concerning the USD,  there will be a release of the ADP non-farm employment payrolls forecast at 1:15pm London time, followed by ISM Manufacturing PMI data at 3pm. There is nothing of high importance scheduled today concerning 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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