Market Overview: Bitcoin
This week, Bitcoin hit a new all-time high, surpassing the previous peak set on March 14, 2024, after trading below it for several months. Since then, a test of this high has been anticipated, fueled by the strong bull breakout that began early in 2024. Our reports have consistently emphasized the likelihood of this outcome, noting how the bullish momentum would drive Bitcoin toward retesting these levels.
Coinciding with the U.S. elections, where Donald Trump emerged as the elected president, Bitcoin’s all-time high comes amid promises of crypto-supportive policies. Trump’s pro-cryptocurrency stance during his campaign included pledges for a “national strategic crypto stockpile” to retain Bitcoin seized by the government rather than liquidating it, as done in previous administrations. Should these initiatives come to fruition, Bitcoin stands to benefit, potentially driving long-term growth. Notably, the approval of the Bitcoin ETF earlier this year marked a milestone for Bitcoin adoption, and its impact could lead to reduced volatility as clarity and institutional confidence in Bitcoin escalates.
Bitcoin
The Weekly chart of Bitcoin
Bitcoin’s weekly chart has been trading within a trading range since March 2024—a period of balance between buyers and sellers. This range, mainly stretching from $60,000 to $70,000, has acted as a critical battleground for bulls and bears, with each level functioning as key support and resistance zones. Buyers consistently entered the market around $60,000, solidifying it as support, while sellers clustered around $70,000, establishing it as resistance. This range represents a zone of indecision, with participants waiting for directional confirmation.
In our previous analyses, we anticipated that Bitcoin would eventually exceed the March 14th all-time high, largely due to the liquidity pooled around this level, attracting significant interest from traders. Although bears attempted to shift the market lower, potentially targeting the mid-range levels between $35,000 and $40,000, they faced strong buying pressure all the time. The bulls, committed to buying at or below $60,000, kept Bitcoin’s price from declining significantly, with $50,000 proving to be a pivotal level where buyers aggressively stepped in, driving prices back up swiftly.
After rebounding from $50,000, Bitcoin developed a breakout mode pattern, which we discussed. This breakout ultimately favored the bulls, and the chart now presents two potential measured moves targets: one around $80,000 and another near $90,000. With the current all-time high at $77,300, the price is near the $80,000 target.
Bitcoin’s recent close above the March 14th high effectively breaks the previous trading range established since that date. This breakout suggests a measured move projection that could lift Bitcoin’s price toward $100,000. In the coming week, bulls will look for a strong follow-through, ideally a bull body candle closing above this week’s high, to confirm the breakout.
Conversely, bears aim for an expanding triangle pattern, targeting the lower end of the trading range around $49,000. They hope to see a reversal next week, creating a bearish signal that could cause recent buyers to exit their positions, potentially driving prices lower.
Historically, betting against bull breakouts has been a losing strategy on Bitcoin, so bears are cautious. Meanwhile, bulls who position with well-defined stop-losses and sound exit strategies stand a higher probability of success, particularly if they focus on letting profits run in the event of an extended trend. That said, the importance of trade management and exit strategies remains critical, as no setup guarantees a profitable outcome for the very next trade.
The Daily chart of Bitcoin
On the daily chart, Bitcoin is within a bull channel, marked by successive higher highs and higher lows. This week, the strongest bullish candle of the current trend appeared, spurred by reactions to the U.S. election outcome. However, this sudden bullish momentum arrives possibly late in the trend, touching the upper trend line and forming potential wedge tops.
While some bulls anticipate a continuation breakout, the daily chart suggests caution. Throughout our recent reports, we’ve highlighted buying opportunities at $65,000, with entries either on breakouts or via limit orders around $66,500 (breakout point) or $70,000 (higher high). However, buying now, at what could be the top of the bull channel, poses greater risks. The current breakout bar might serve as a climactic bar, indicating a possible exhaustion rather than a sustained breakout.
This may be an opportune moment for bulls to consider taking full or partial profits and reevaluating after observing the bears’ strength during the next pullback. For bulls who maintain long positions, placing stop-loss orders below the most recent major higher low around $66,700 involves risking a significant portion of unrealized gains. Unlike last week, where it was prudent to hold positions below key support levels due to strong upside targets, there is now more incentive to secure profits.
For bears, a trading range or pullback would be ideal, providing them with entry points for potential major trend reversal setups. Their initial targets lie near the bull climax low, around the $65,000 region. However, it may be too soon for bears to enter unless they positioned themselves by selling limit orders above the March 14, 2024, all-time high. Instead, bears might look for a Low 2 or Low 3 pattern or any type of breakout mode structure as potential setups, though such patterns are not yet visible on the chart. Patience will be key for bears awaiting favorable conditions.
We extend our heartfelt gratitude to our readers for joining us in this week’s in-depth price action analysis. Your engagement and trust motivate us to delve deep into the intricacies of the market, offering insights that, we hope, are both informative and valuable. We invite you to share this analysis with colleagues or friends who may benefit from a nuanced understanding of the current Bitcoin landscape. Together, we can continue growing as traders and enthusiasts, navigating the ever-evolving world of financial markets. Stay disciplined in your trading, and may your decisions yield favorable results. Thank you for being an essential part of our journey.
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