BTC/USD Forex Signal: Bullish Above $23k

Bitcoin advancing to new 1-month highs on risk rally.

Previous BTC/USD Signal

My previous signal last Wednesday produced a nicely profitable long trade from an hourly inside bar which rejected the support level which I had identified at $19,315.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

• Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $22,962 or $21,449.
• 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

• Short entry after a bearish price action reversal on the H1 timeframe following the next touch of $24,016 or $25,000.
• 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.

Advertisement

BTC/USD Analysis

I wrote in my previous analysis last Wednesday that the price of BTC/USD was weakly consolidating just above the support level at $19,315. I thought that a major breakdown was likely if the US CPI data release was higher than expected. I was completely wrong: US inflation came in unexpectedly high at 9.1% last week, but the price rose from this area and has been rising ever since. The US inflation release was a good example of “buy the rumour, sell the fact”, as markets quickly began to believe that the data was not as bad as it had initially appeared, sparking a risk-on rally at the end of last week which has continued into this week.

This new weakness in the US dollar and strength in risky assets, the latter of which of course includes Bitcoin, has pushed the price up over recent days in a strong, multi-wave bullish move, which has been successful in flipping former resistance levels to support.

The risk-on environment may crumble later today if inflation data releases are unexpectedly very high, or if it becomes clear tomorrow that the European Central Bank is in real trouble. However, it is likely to continue today, and as the short-term momentum continues to be bullish, it is most likely that we will see a further rise in the price of Bitcoin today.

I will be happy to take a long trade if get a bearish retracement to the support level at $22,962 and a firm bullish bounce there. More aggressive day traders may want to trade long on dips on shorter timeframes which then reverse back into the dominant bullish trend.

Concerning the US Dollar, there are no high impact items scheduled for release today.

Ready to trade our free Forex signals? Here are the best MT4 crypto brokers to choose from.