BTC/USD Forex Signal: Dull Consolidation Below $16,950

Bitcoin is stuck in a flat consolidation, with neither bulls nor bears succeeding in making any major breaks.

Previous BTC/USD Signal

My previous Bitcoin signal on 14th December was not triggered as there was no bearish price action when the resistance level which I had identified at $18,107 was first reached that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $16,233 or $15,945.
  • Place 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 run.

Short Trade Ideas

  • Short entry after a bearish price action reversal on the H1 timeframe following the next touch of $16,949, $17,089, $17,271, or $17,544.
  • Place 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.
  • 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 in my previous analysis on 14th December that the price of BTC/USD looked likely to

Continue its weakly bullish trend, so I was looking for long trades from support levels, or to get long after an unlikely bullish breakout above $18,107.

This was an OK call if handled cautiously, as the main move over the day was bullish, but support was never reached. Finally, the breakout above $18,107 barely lasted an hour or so which is not enough time for the price to be considered established above that level, so I was correct to see this as a pivotal point.

The medium-term picture has looked more bearish ever since that day, with the price not reaching that resistance level again, but instead printing lower and lower resistance levels. The closest one seems to be working in suppressing the price, at $16,949. As there are no support levels below the price until $16,233 the price has some room to fall here, so I will be happy to take a trade from a bearish rejection of that level if it sets up today, with $16,233 or nearby my target for a profitable trade exit.

Despite this potential opportunity, it must be said that Bitcoin has not been a very fruitful trading ground lately, and I do not expect that to change today or in the near future.

BTC/USD

Concerning the US Dollar, there will be a release of Final GDP data at 1:30pm London time.

Ready to trade our free daily Forex trading signals? We’ve shortlisted the best MT4 crypto brokers in the industry for you.

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.