Market Overview: Bitcoin
This week, the October monthly bar closed with a bull bar that nearly reached Bitcoin’s previous all-time high. The monthly close, positioned above September’s high, suggests that November or December may bring a renewed attempt to test October’s high.
Reflecting on the year so far, Bitcoin has largely moved within a trading range. With the last two months of the year approaching, traders are keen to see how the year will conclude. January marked a significant milestone with the launch of the long-awaited Bitcoin ETF, which spurred a strong bull breakout that was followed, as stated, by sideways trading for most of the year.
Looking ahead, the upcoming U.S. elections are expected to bring volatility to the markets. Many traders may prefer to stay on the sidelines as they gauge the impact of this event.
Bitcoin
The Monthly chart of Bitcoin
On the monthly chart, traders are currently debating whether Bitcoin’s price action is situated within a market cycle marked by a trading range or within a tight bull channel. The primary focal point for this discussion is the strong bull breakout that occurred after surpassing the previous all-time high in 2021. Since this bullish momentum, prices have retraced to previously traded areas, suggesting the potential to remain within a broader trading range. Breakouts, while often precursors to sustained trends, have faced resistance lately, and the market’s hesitation to continue upwards has resulted in sideways action. This phenomenon aligns with typical trading range dynamics, where neither bulls nor bears assert clear dominance.
This hesitance is underscored by the behavior following a bearish reversal bar that emerged after the bull breakout. Although this bear bar was substantial, it failed to decisively shift control to the bears. Instead, we observed persistent support levels at critical price points—$60,000, $55,000, and $50,000—where buyers continued to defend their positions. This resilience reflects the bullish conviction needed to sustain an upward trajectory, even as price temporarily tests lower levels. Each attempt by bears to initiate a significant reversal has thus far been met by renewed buying interest, bolstering the bull case, especially as we approach key barriers.
In October, Bitcoin printed a bullish monthly bar, closing above September’s high and nearly reaching the all-time high. Despite a prominent upper tail on October’s close, it is likely that this high will be tested—and surpassed—in November or December.
For bears, however, a double top at the current levels could provide a critical pivot for initiating a deeper retracement to the $35,000–$40,000 zone. This region aligns with the 50% retracement of Bitcoin’s entire price range. Bears aiming to capitalize on this setup might consider a sell entry near $70,000 with profit-taking targets between $40000 (swings) and $60000 (scalps) and a stop placed above $75,000 or $80000. Although such trades may carry lower probabilities, the favorable risk-reward ratio offers an appealing setup.
In the long term, historical tendencies on the monthly chart favor bulls, as past bull breakouts have typically been sustained over extended periods. This pattern provides bullish traders with a sense of confidence that the path of least resistance remains upward, allowing them to structure trades with a degree of bullish bias while remaining mindful of potential retracements.
The Weekly chart of Bitcoin
Bitcoin’s weekly chart currently resides within a trading range, a phase within the broader market cycle characterized by limit order activity at crucial levels. The $60,000 to $70,000 zone has emerged as a focal area, acting as both support and resistance as traders respond to these psychologically significant price levels. Buyers are active around $60,000, reinforcing it as a support zone, while sellers cluster near $70,000, establishing a critical resistance level. This equilibrium reflects the current indecision between bulls and bears, each side awaiting clearer signals before committing to a directional move.
Despite the consolidation, the “always in” position on the weekly chart favors the bulls due to the initial breakout earlier in the year. This breakout appeared to establish a potential bull flag; however, the prolonged sideways movement that followed has tempered this momentum somewhat.
The current weekly candle—a small bull bar with a close far below the midpoint—may potentially end as a bearish bar. The outcome of this close is noteworthy; a bullish close near the midpoint could signal an imminent retest of October’s high, whereas a close well below the midpoint may indicate a delayed attempt, requiring several weeks of consolidation.
It is highly probable that Bitcoin will, at some point, trade above the current all-time high, as liquidity in this zone draws attention from both long and short traders. Bulls remain optimistic that the market will continue within a bull trend, with strong intentions to challenge the $75,000 and $80,000 levels. This perspective is supported by a series of lower highs, which have functioned as price magnets, effectively drawing the market higher as anticipated in prior reports.
The market’s sensitivity to the key levels within this trading range requires a disciplined approach, as these zones are prone to rapid shifts in sentiment. While bulls currently maintain control, a sharp pullback could quickly alter the outlook, especially if sellers manage to drive prices decisively below $60,000.
The Daily chart of Bitcoin
Although the daily chart isn’t the primary focus of this week’s report, it warrants mention given recent developments. In last week’s analysis, we suggested that buyers might find value in a breakout above the prior week’s bull flag. This scenario materialized with a fresh breakout, affirming the bullish thesis. Two legs up measured move were also reached. Bulls who entered at the breakout are likely adjusting stops upward ahead of continued strength.
Looking forward, traders will be watching for the price to remain above the major higher low, as this would reinforce the bull stance. Conversely, bears aim to push towards this level, hoping to initiate either a trading range or a reversal down to $60,000. Recent price action near the all-time high appears to indicate profit-taking activity, yet the resilience of the major higher low will be an indicator of strength.
We extend our gratitude to our readers for engaging with our analysis and accompanying us on this journey through price action. Your continued interest and feedback inspire us to provide thorough insights each week. We encourage you to share this analysis with peers and colleagues who may benefit from these perspectives. Let’s continue to grow together as we navigate the ever-evolving landscape of financial markets. Stay disciplined, and may your trading decisions be rewarded with favorable outcomes. Thank you for being a valued part of our journey.
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