BTC/USD Forex Signal: Bearish Below Descending Trendline - Financial Daily News Site

BTC/USD Forex Signal: Bearish Below Descending Trendline

Buyers remain below $20k.

Previous BTC/USD Signal

My previous signal last Thursday was not triggered, as none of the key support or resistance levels which I had identified that day were reached by the price.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 5pm Tokyo time Friday.

Long Trade Idea

  • Go long after a bullish price action reversal on the H1 timeframe following the next touch of $19,164.
  • 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 $20,827, the descending trend line, or $23,000.
  • 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.

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BTC/USD Analysis

I wrote in my previous analysis last Thursday that we were seeing a bearish consolidation between $20k and $23k, with the current dominant wave at the time of writing being bearish.

I thought that longer-term traders should look for a short from another reversal at $23k or wait for a daily close below $19,500 which would be a very bearish sign.

This was a good call insofar as I was correct to look to the short side – the price fell over the day – and I was right to refuse to look for any long trades.

The technical picture now is still bearish over the longer and medium terms. There is a clear and strong long-term downwards trend, and the medium-term picture is dominated by the descending trend line which is shown in the price chart below.

I see the outlook as remaining basically bearish if the price remains below this descending trend line, but it should be noted that after last week’s strong fall of approximately 30% in value, we have seen buying below the big round number at $20k over the past few days. It might be that the downwards trend is going to pause here, or even reverse for a while.

I think the best approach here will be to take a short trade from a bearish reversal which might set up at the descending trend line or following a daily (New York) close below $19,164.

If the price can get established above $23k, which I think is unlikely to happen, that would be a surprising bullish sign and indicate a deeper bullish retracement would probably happen quite quickly.

BTC/USD

Concerning the US Dollar, the Chair of the Federal Reserve will be testifying before the House of Representatives at 3pm London time. There is nothing of high importance due today regarding Bitcoin.

Tags: #BTCUSD #Forex #Signal #Bearish #Descending #Trendline

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