The short version, the probability that Bitcoin tests the breakout price around $69,500 is very high. That's simply the nature of breakouts; bulls take profits (sell orders) until the previous high is reached, at which point the bulls start buying again, and the bears take their profits (buy orders), driving the market up for another leg.
The question is, what is our next move as traders? Or even Bitcoin investors?
How do we trade this? 🤔
Let's zoom out to the Monthly chart. Bitcoin is resting on the 9EMA, a support area we've closed above it since September of 2023. Our current context is we've broken out of the 2021 cycle high of $69,500 and reached a new high just shy of $110,000. It's clear we're in pullback mode right now, so far-reaching down to $78,000.
Fundamentally, there aren't many catalysts for bullish activity. Bulls are simply taking profit at the first 6-figure Bitcoin price, which is both a psychological and technical price for selling. Monetary policy is still in a state of qualitative tightening, inflation has been slowly rising since September 2024, from 2.4% to 3%. Not a dramatic move, which certainly isn't helping Bitcoin move to the upside. Bitcoin seems to respond more to monetary policy than inflation rates and while the rates have steadily climbed, it's not enough to shock the market, while monetary policy has largely stayed the same.
Technical analysis shows TOTAL, TOTAL2, and TOTAL3 crypto market cap charts all were rejected at key resistance areas in early December. Bitcoin broke the 2021 right shoulder around $46,000 to $73,000, then had a measured move up to $109,000, about a 55% move each, give or take. We're simply in a state where we've reached a key resistance level after a breakout while the market as a whole is in a state of uncertainty. I believe that uncertainty will lead to a capitulation down to the high $ 60,000s, even if it's a quick wick. This would likely lead to a $1,500 ETH, $1.50 XRP, it may look ugly. But take a look at past cycles; a 30-40% pullback for Bitcoin is just another Thursday in the crypto market. The alts can pull back as much as 50%-60%.
I think we wait for the buy signal. Look for a pullback to the breakout area at $69,500, and wait for the market to tell us that we found the buy zone with a strong candle close on or near its high on the Daily chart, likely somewhere around $75,000. Then I believe $150,000 is the area for this cycle high based on the Lifetime Resistance and measured move target. The measured move shows a 57% move up after the breakout; if we take that 57% move up and stack it on the mid-price of the current trading range at $91,000, that takes us to right around $150,000. Anything beyond that is a bonus. I think from there, it makes a second attempt to breach the high, followed by our 12-18 month bear market as shown in the chart.
💡 Trade Idea 💡
Long Entry: $75,000
🟥 Stop Loss: $55,000
✅ Take Profit #1: $105,000
✅ Take Profit #2: $135,000
⚖️ Risk/Reward Ratio: 1:3
🔑 Key Takeaways 🔑
1. Breakout above 2021 Cycle High $69,500
2. Psychological and technical high of $100,000 reached
3. Pullback phase has been in motion since December, breakout zone is the buy target
4. Wait for a two-legged pullback toward the Monthly 30EMA (breakout zone), look for strong buy signal, large bull candle closing on or near its high.
5. RSI is near 64.00 and below the Moving Average. Wait for contact and a drop toward 60.00 in concurrence with the price action to enter.
💰 Trading Tip 💰
It's reasonable to take half profits at the first resistance target in a long trade, or the first support target in a short trade. Using a 1:1 Risk/Reward Ratio for your first target, you can move your stop loss up to your entry price, locking in profits. This allows you to watch the rest of the trade execute without worry of losing money. This helps improve trading psychology and the equity in your account.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and Follow to learn more about:
1. Reading Price Action
2. Chart Analysis
3. Trade Management
4. Trading Psychology
The question is, what is our next move as traders? Or even Bitcoin investors?
How do we trade this? 🤔
Let's zoom out to the Monthly chart. Bitcoin is resting on the 9EMA, a support area we've closed above it since September of 2023. Our current context is we've broken out of the 2021 cycle high of $69,500 and reached a new high just shy of $110,000. It's clear we're in pullback mode right now, so far-reaching down to $78,000.
Fundamentally, there aren't many catalysts for bullish activity. Bulls are simply taking profit at the first 6-figure Bitcoin price, which is both a psychological and technical price for selling. Monetary policy is still in a state of qualitative tightening, inflation has been slowly rising since September 2024, from 2.4% to 3%. Not a dramatic move, which certainly isn't helping Bitcoin move to the upside. Bitcoin seems to respond more to monetary policy than inflation rates and while the rates have steadily climbed, it's not enough to shock the market, while monetary policy has largely stayed the same.
Technical analysis shows TOTAL, TOTAL2, and TOTAL3 crypto market cap charts all were rejected at key resistance areas in early December. Bitcoin broke the 2021 right shoulder around $46,000 to $73,000, then had a measured move up to $109,000, about a 55% move each, give or take. We're simply in a state where we've reached a key resistance level after a breakout while the market as a whole is in a state of uncertainty. I believe that uncertainty will lead to a capitulation down to the high $ 60,000s, even if it's a quick wick. This would likely lead to a $1,500 ETH, $1.50 XRP, it may look ugly. But take a look at past cycles; a 30-40% pullback for Bitcoin is just another Thursday in the crypto market. The alts can pull back as much as 50%-60%.
I think we wait for the buy signal. Look for a pullback to the breakout area at $69,500, and wait for the market to tell us that we found the buy zone with a strong candle close on or near its high on the Daily chart, likely somewhere around $75,000. Then I believe $150,000 is the area for this cycle high based on the Lifetime Resistance and measured move target. The measured move shows a 57% move up after the breakout; if we take that 57% move up and stack it on the mid-price of the current trading range at $91,000, that takes us to right around $150,000. Anything beyond that is a bonus. I think from there, it makes a second attempt to breach the high, followed by our 12-18 month bear market as shown in the chart.
💡 Trade Idea 💡
Long Entry: $75,000
🟥 Stop Loss: $55,000
✅ Take Profit #1: $105,000
✅ Take Profit #2: $135,000
⚖️ Risk/Reward Ratio: 1:3
🔑 Key Takeaways 🔑
1. Breakout above 2021 Cycle High $69,500
2. Psychological and technical high of $100,000 reached
3. Pullback phase has been in motion since December, breakout zone is the buy target
4. Wait for a two-legged pullback toward the Monthly 30EMA (breakout zone), look for strong buy signal, large bull candle closing on or near its high.
5. RSI is near 64.00 and below the Moving Average. Wait for contact and a drop toward 60.00 in concurrence with the price action to enter.
💰 Trading Tip 💰
It's reasonable to take half profits at the first resistance target in a long trade, or the first support target in a short trade. Using a 1:1 Risk/Reward Ratio for your first target, you can move your stop loss up to your entry price, locking in profits. This allows you to watch the rest of the trade execute without worry of losing money. This helps improve trading psychology and the equity in your account.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and Follow to learn more about:
1. Reading Price Action
2. Chart Analysis
3. Trade Management
4. Trading Psychology
Trade active
A quick update! I'm long in ETH, but BTC's movement are obviously driving my other crypto trades.First, an autocorrect issue in the original post: QUANTITATIVE tightening, not qualitative.
Second, the FOMC is this week and will likely not render a change in monetary policy. This will likely send the market lower; BTC may hit $72,000 or wick lower as a result.
We should wait for this move to complete then look for a strong bull response before entering any further capital into the market.
More updates soon!
-Joe
-Joe Dean
Trader Engineering Course
**Available Now at TraderEngineering.com**
Trader Engineering Course
**Available Now at TraderEngineering.com**
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
-Joe Dean
Trader Engineering Course
**Available Now at TraderEngineering.com**
Trader Engineering Course
**Available Now at TraderEngineering.com**
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.