BTC/USD Forex Signal: A More Bullish Consolidation Above $28,607

Adam Lemon

The price has room to rise to $33,445.

Previous BTC/USD Signal

My last signal on 18th May was not triggered, as none of the key support or resistance levels were reached.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Go long after a bullish price action reversal on the H1 timeframe following the next touch of $29,559, $28,607, $27,981, or $27,487.
  • Put 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.
  • 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

  • Go short after a bearish price action reversal on the H1 timeframe following the next touch of $33,445 or $33,828.
  • Put 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.
  • 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 in my last analysis on 18th May that if the nearby support level at $28,607 held, the line of least resistance would be upwards, so I expected an upwards price movement to happen as the next major directional move.

I was looking to take a long trade here if we had gotten a retracement to $28,607 and a bullish bounce off that level.

This was a good call, although while the support level at $28,607 has continued to hold, the price has not made a significant rise yet. However, the upwards movement I was looking for is looking more and more likely to materialise soon.

The bullish case is slightly strengthened by the new higher support level which was established at $29,559. However, this level is far less important and likely to be strong than $28,607.

My basic approach remains the same: $28,607 is the level to watch. A daily close below that level, and preferably below $28,000, could trigger a very strong downwards move all the way to $10k or below. However, it is starting to look as if this level will hold, and it may become a long-term low, offering a great risk reward ratio on a long trade entry, although the price faces several resistance levels above $33k.

I will take a short trade if we get a daily close below $28k today.

BTC/USDRegarding the US Dollar, there will be a release of the most recent FOMC Meeting Minutes at 7pm London time.

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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