SIGNAL FOREX

BTC/USD Forex Signal: Continuing Weak Bearish Trend – DailyForex.com


Selloff from $40k area slowing in momentum.

Last Monday’s Bitcoin signals were not triggered, as there was no bullish price action when the price reached the support level at $38,653.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $37,633, $36,656, or $35,258.

  • 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 Ideas

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $38,728 or $40,625.

  • 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.

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BTC/USD Analysis

I wrote last Monday that the near-term direction of Bitcoin was unclear. I thought that the support level at $38,653 looked likely to be very strong, so if the price could get established below $38,653, that would be a bearish sign.

I was wrong about the strength of the identified support level at $38,653 but I was correct that once the price got below it would continue downwards. However, the pace of the downwards movement has slowed.

We have a long-term bearish trend and a continuing medium-term selloff from the recent brief pop above the big round number at $40k. Most cryptocurrencies have been falling over recent days with reasonable momentum.

In this market condition, I think the best approach is to wait and see if we today get two consecutive hourly closes below the support level which is currently being felt at $37,633 and enter a careful short trade if that sets up.

However, it is worth noting that the price only has another $1k or so before it would meet the next support level, so it does not seem to have a lot of room to fall.

BTC/USD

Concerning the USD, there will be a release of the ADP non-farm employment forecast at 1:15pm London time followed by ISM Services PMI data at 3pm London.

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