BTC/USD Forex Signal: Very Bullish

Adam Lemon

Bitcoin is now trading above $55k.

Last Wednesday’s BTC/USD signal were not triggered, as there was no bearish price action when the price reached the resistance level identified at $54,864 that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must 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 $56,168, $54,272, or $51,912.

  • 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 $57,913 or $59,691.

  • 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 Wednesday that the picture had become even more bullish with no obvious resistance levels holding back the price from a further advance to $54,864. I was looking for a long trade from a bullish bounce at $49,710 but unfortunately the price never got back there before taking off quite dramatically.

The Bitcoin picture is even more bullish now as the price trades above $56 close to a new 5-month high price. There was a strong spike down a few hours ago but looking at the price chart below shows there are several clear support levels below which continue to look valid.

We are seeing solid buying of Bitcoin and there is reason to think the price will go higher still despite the pause over the last few hours. There is also a credible rumour that the US government is considering a major regulatory crackdown on cryptocurrencies, although any new measures would certainly be less stringent than those taken by China.

A key level to watch for an early indication of today’s likely direction is whether the nearby support level at $56,168 holds up. If it does, we will probably see a further rise today to at least $57,913.

I do not want to a take a short trade in Bitcoin today under any circumstances.

The best approach will likely be a long trade from a bullish bounce at either $56,168 or $54,271.

BTC/USD

Regarding the USD, there is nothing of high importance scheduled today. It is a public holiday in the USA.

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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