BTC/USD Daily Forecast: Double Bottom

Consolidating Bitcoin, finding buyers for the coin below $20 thousand.

Previous recommendations for trading the currency pair BTC/USD

My previous recommendations on August 25th for BTC/USD were not activated as there was no price action to the upside when the two support levels I first identified were reached that day.

Today’s recommendations for trading the currency pair BTC/USD

  • Risk 0.50% per trade.
  • Trades may only be entered before 5 pm Tokyo time on Thursday.

Buy trading ideas

  • Take a buy trade after the price action reverses to the upside on the H1 timeframe after the next touch at $1966, $19315 or $19164.
  • Set a $100 stop loss below the local swing low.
  • Set your stop loss to breakeven as soon as the trade makes $100 profit depending on the price.
  • Take 50% of the position as profit when the trade makes $100 profit at the price and leave the rest of the position to work.

Selling Trading Ideas

  • Take a sell trade after the price action reverses downward on the H1 time frame after the next touch at $20,532 or $20,782.
  • Set the $100 stop loss order above the local swing high.
  • Set the stop loss order to break even once the trade has made a profit of $100 depending on the price.
  • Take 50% of the position as profit when the trade makes $100 profit at the price and leave the rest of the position to work.

The best way to identify a classic “price action reversal” is to close an hourly candle, such as a pin bar, doji, outside candle or even just a sunken candle with a higher close. You can exploit these levels or areas by monitoring the price action that occurs at the specified levels.

Bitcoin/US dollar trading analysis

I wrote in my previous analysis on August 25 that the price of BTC/USD has room to rise and appears unwilling to drop further, with no major resistance levels until $22,713.

I was looking to buy a breakout to the upside above $21,900 / $22,000, as I was expecting the price to go higher during the day.

I was wrong about the price rally, but I was right that the area around $21,900 would be pivotal, as this area provided strong resistance that sent the price lower.

Since then, we have seen a strong breakdown to the downside as risk sentiment soured on August 26th, but the price continued to print a double bottom at the $19,616 support level with the two bottoms producing strong bounces. The price may now top near the $20532 resistance to produce a double top. If that happens, we will have a well-defined consolidation range between $20,532 and $19,616 which can be played by trading reversals at any of the extreme levels.

The main thing to watch in Bitcoin is whether the price will be set below the major support level at $19,163. There is no sign of that happening yet, but if it does, it could potentially lead to a rapid crash to at least $14,000. An alternative scenario is for Bitcoin to hold above $22,713, which could herald the beginning of a major reversal in the bullish trend and a new bullish trend.

In the near term, it might be wise to stay away from trading bitcoin today, or at least until we see a convincing reversal to the downside in the short term at or near $20,532.


The chart was generated by . platform TradingView

Regarding the US dollar, there will be an announcement of the ADP Non-Farm Employment Outlook at 1:15 pm London time.

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