Good morning Forex Kings,
As we move across to our new preferred broker, they also offer Crypto currency products for us to trade. I know a lot of you have been asking about trading crypto. We are sending out a link to the new broker today so everyone can take advantage of this opportunity.
Today we are looking at BTCUSD (Bitcoin). The fundamentals around crypto are slightly different than the forex market, however technical analysis is extremely useful.
Many experts believed bitcoin/crypto would be the next hedging solution or safe haven asset when the financial market takes a down turn. This has not happened so far and one of the reasons could be to do with China.
Some of the largest bitcoin/crypto companies are located in China despite the governments strict stance on crypto assets. However, China equates to over two thirds of the network hash power. China has been suffering and been on lock down due to the corona-virus, however it appears companies are now gradually coming back online as the number of cases in China has appeared to peak.
This means once China comes back online, we could see a pick up in BTC prices.
Over the next couple of months we will also see the next bitcoin halving which has resulted in a price surge on the previous cases.
We will now be looking to enter long positions from the next key support zone.
BTCUSD – Technical Analysis
BTCUSD broke out of a negative trend earlier in the year the market is now dropping lower to potentially retest the broken trend line. The 7400 level appears to be the next key support zone, it is also the 161.8% FIB extension level.
Trade Setup: BUY LIMIT – 7400, stop loss set at 7100 and take profit left open to run. Short term target can be found at 9000, and a long term target 12,000.
Stop loss: 300 PIPS
With this trade we will be looking to use a trailing stop loss, moving the stop loss up into a profit as the price of BTC pushes higher.