BTC/USD Forex Signal: New Support at $45,326

Adam Lemon

The price is bearish below $45,326.

Last Wednesday’s BTC/USD signal produced a profitable long trade from the bullish bounce at the key support level identified at $46,837.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be taken prior to 5pm Tokyo time Tuesday.

Long Trade Ideas

  • Go long after a bullish price action reversal on the H1 time frame following the next touch of $45,326 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 Idea

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $46,381, $46,867, or $47,263.

  • 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 the price had risen to the key resistance level at $47,532 and the big question was whether this resistance level would 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 broke down below $46,171 then I expected that would be a bearish sign.

This was a good call, as the break above $47,532 did then produce a stronger upwards price movement which reached as high as $48,400 before falling back.

A few days can be a long time in Bitcoin, and we have seen the price tumble significantly over the past few days due to a general souring of risk sentiment in the markets. The defining feature within the price chart below is the support level at $43,836 which is very pivotal, but we have a new higher support level which has just formed as a flip from resistance to support, and this is going to be the first key level that will either hold or break down – so bulls have two main lines to defend if the action takes a bearish turn.

I am ready to take a long trade following a healthy bullish bounce at either of the two closest support levels. Alternatively, a short trade would look attractive from a bearish reversal at the resistance level of $46,867, although there could be strong resistance beginning at any point from as low as $46,381.

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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