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BTC/USD Forex Signal: Strong in Consolidation

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Potential signal: I am an advocate of buying dips here. I would buy dips every $1,000 in small increments, with a total stop loss of $57,500 below. I would aim for at least $75,000 above. I would also make it a point to leave at least some exposure on that breakout above $75,000 but would also make sure to at least take some profit.

  • Bitcoin was somewhat quiet during the trading session on Friday, which of course is not a huge surprise.
  • After all, Friday was Good Friday in America, so a lot of the volume from the Wall Street ETF situation would not have been there.

With that being said, I think we still have a very bullish market, and I think this bullish market continues to be more of a buy on the dip type of market. After all, we have seen a pullback towards the $60,000 level only to watch BTC/USD rally again. Above, I think we have a significant resistance barrier in the form of $75,000, which if we can break above it, probably brings in more momentum.

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Sideways? Maybe.

All things being equal, it does make a certain amount of sense that we would grind sideways in some type of consolidation phase momentarily as the market got way ahead of itself with the massive amount of inflows coming into the Bitcoin ETF. In general, this remains a bullish market, but sooner or later it will have a significant pullback. It does not show any signs of that yet, and therefore you have to play it from the long side regardless of what you see.

BTC/USD Forex Signal Today 01/04: Strong (graph)

As long as we stay above the 50 day EMA, which currently sits at roughly $59,000 below, you have to think of this as a long only market or at the very least, you're on the sidelines and you're not trying to short it. That being said, keep in mind that institutions can short Bitcoin much easier now that it's being packaged in an ETF format. So, the market has fundamentally changed for the long term. I imagine we're probably going to have to spend most of this year sorting out what that actually means.

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Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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