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BTC/USD Forex Signal: Consolidation Above $41,408

 The technical feature which stands out now is the support level at $41,408, which looks like it is going to be a solid base for the consolidation which we are seeing happen now.

My previous BTC/USD signal on 30th January produced a profitable short trade from the bearish rejection of $43,609.

Today’s BTC/USD Signals

  • Risk 0.75% per trade.
  • Trades must be entered before 5pm Tokyo time Friday.

BTC/USD Signal Today - 01/02: Consolidation Above $41,408 (Graph)

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $41,408, $40,665, or $40,423.
  • 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 $42,634, $43,057, or $44,508.
  • 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.
  • 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.

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.

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    BTC/USD Analysis

    I wrote in my previous BTC/USD analysis two days ago that the technical picture had become more bullish but I thought that bulls may have run out of momentum after the price failed to clear the resistance level at $43,609. I was still looking for a long trade following two consecutive higher hourly closes above $43,609 but only targeting the next resistance level at $44,508.

    This was a good call but only insofar as the level at $43,609 was pivotal, giving the chance for a profitable short trade entry upon the bearish rejection of this level.

    The technical picture now is more bearish, with the price retreating even further. The technical feature which stands out now is the support level at $41,408, which looks like it is going to be a solid base for the consolidation which we are seeing happen now.

    The only strategy I can feel comfortable here is looking for a long trade following a bullish bounce off the support level at $41,408 as it looks so strong, but I am not confident that such a trade would travel far, so I think profits should be taken conservatively on such a trade.

    Regarding the US Dollar, there will be a release of Unemployment Claims data at 1:30pm London time, followed by ISM Manufacturing data at 3pm.

    Ready to trade our daily Bitcoin signals? Here’s our list of the best Bitcoin brokers worth reviewing.

    Adam Lemon
    About 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.

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