As a seasoned analyst with over a decade of experience in the financial markets under my belt, I have seen my fair share of bull runs and bear markets. And let me tell you, Bitcoin is no exception to this rule.
The cost of Bitcoin (BTC) has dropped by 4% over the past week, with a more pessimistic outlook for cryptocurrency in the short term due to a bearish engulfing pattern. Let’s examine three significant points where BTC might find potential recovery opportunities.
4-hour Bitcoin ‘fractal’ and V-bullish reversal
In simpler terms, if Bitcoin shows an immediate change in its direction (bullish) and mirrors the same pattern seen in its chart during Q3, it would be a reoccurrence of a recognizable pattern known as a “market fractal”. This pattern helps traders spot when trends may reverse.
Currently, Bitcoin’s price trend resembles its surge in late July. Interestingly enough, Bitcoin had previously corrected within a comparable range between $68,000 and $70,000 before dipping towards its nearest resistance level.
During July, a trading range, as shown on the left chart, aligns with the current trading range, displayed on the right chart. Specifically, the ranges are $63,200 to $65,000 and $64,500 to $66,000 respectively.
If Bitcoin experiences a similar shift, its graph could potentially form a V-shape and hit a low of approximately $64,500 before resuming its bullish trend towards $70,000. Furthermore, it’s worth noting that the 50-day moving average line provides a solid foundation for both charts, and this support is currently aligning with the price level of significant order blocks.
Satoshi Flipper, a Bitcoin futures trader, pointed out the robust support existing between $66,000 and $64,000. He expressed that the current pricing is ideal for purchasing, considering it as an attractive buying opportunity ahead of the US election outcomes in November.
From a technical perspective, this would be the most ideal BTC bullish reversal.
Fibonacci’s golden zone is on the daily chart
Bitcoin has been steadily increasing since it surpassed its previous local peak of $66,500 on September 27, marking a strong uptrend characterized by higher highs (peaks) and higher lows (valleys). If Bitcoin manages to form another higher low compared to its previous local low of $58,900, it would indicate that the bullish momentum is still in effect.
Given this situation, it’s possible that the next significant low could be found within the Fibonacci levels between 0.5 and 0.618, often referred to as the “golden zone”. Many experienced swing traders prefer to use the Fibonacci range on a larger time frame (high-time frame or HTF) when placing long-term buy orders.
According to the daily graph, the present optimal range for Bitcoin is approximately between $63,900 and $62,000. Upon further examination, this zone aligns with a significant daily trading level at around $63,300.
As I analyze the Bitcoin market trends, it appears that a dip around $62,000-$63,000 might be beneficial for its long-term health. This decline will likely establish a new support level, or higher low (HH2), setting the stage for another surge towards a new peak, or higher high (HH4), following early November.
Axel Adler Jr., a researcher in Bitcoin, additionally pointed out a significant potential for long liquidations around the $64,000 mark, lending credence to the suggested range as a possible “golden zone” outcome.
Bitcoin CME gap remains under $60K
In early September, the value of Bitcoin rose by 18%. This increase created an unfilled gap on the Chicago Mercantile Exchange (CME) market, with the gap situated between approximately $52,000 and $54,000. This price gap has not been bridged as of yet.
According to a previous report by CryptoMoon, during the last two quarters, every gap in CME futures has been closed, yet this specific one hasn’t been filled as of now.
In my analysis, I’ve noticed that a significant level of support around $60,000 is evident in the chart. If Bitcoin were to close daily below this level, it could signal a bearish break of structure (BOS), suggesting a potential shift in the ongoing uptrend that started back in early September.
If Bitcoin‘s price falls below $60,000, it would contradict its current uptrend pattern (higher highs and higher lows). This could postpone reaching new record highs until at least 2025, as such a drop might trigger widespread panic selling and forced liquidations due to the psychological significance of the $60,000 level.
At this moment, it’s unlikely that we’ll see a re-test of the CME gap, unless a major bearish economic occurrence takes place in the global market.
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2024-10-23 21:25