BTC/USD Forex Signal: Strong Bearish Momentum

Bitcoin: First signs of a potential temporary bottom near $20k.

Previous BTC/USD Signal

My last signal on 2^nd June was not triggered, as there was no suitable price action when any of the key levels were first reached that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

• Go long after a bullish price action reversal on the H1 timeframe following the next touch of $20,910, $19,977, or $19,578.
• 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 $24,016, $25,000, or $26,012.
• 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 last analysis on 2^nd June that the best strategy for now was to stand aside until the price tests the $28k area again, and to watch what happens. If Bitcoin recovered and gets established above $32k / $33k, that would be a bullish sign.

This was a good call, as the price never got established above $32k / $33k since then, but it did finally break down below $28k, which has triggered a sharp fall over recent days, as I had expected.

There is a great deal of fear in crypto markets now, with prices beginning to force institutional liquidations. Technically, the long-term price charts suggest that the strong bearish movement could drive the price of Bitcoin all the way to $13k quite soon.

There is strong risk-off sentiment in the market, which is punishing the crypto sector, but crypto also has its own problems, so Bitcoin is suffering a double whammy.

Despite the very bearish situation, over the past few hours there have been initial signs that the price may be making a bottom just above $20k. We see quite a strong bounce from this area, but it is far from clear that this can hold up.

I think a short trade from a bearish reversal at the nearest key resistance level, which is situated at $24,016, will be a very attractive trade if it sets up today. This is likely to be the day’s pivotal point. If the price can get established above that level, it would be a bullish sign suggesting that $20k will hold for some days or even weeks.Regarding the US Dollar, there will be a release of PPI data at 1:15pm London time.