BTCUSD | 1D SMC Short Setup with Refined SL and Targets
Description:
This analysis identifies a high-probability short opportunity for BTCUSD on the 1D timeframe using the Smart Money Concepts (SMC) framework. The chart shows clear bearish confluences, including market structure, supply zones, liquidity levels, and Fibonacci retracement zones. I believe the current bullish momentum is merely a manipulation driven by inflation news and the upcoming Trump inauguration. Following these events, I anticipate a significant market correction. Here’s the detailed breakdown and trade plan:
Analysis:
Market Structure:
Break of Structure (BOS): Price has confirmed a bearish trend with BOS to the downside, signaling a continuation of lower highs and lower lows.
Trendline Resistance: A well-defined downward trendline indicates selling pressure, reinforcing the bearish bias.
Key Zones and Liquidity:
Supply Zone: Highlighted in purple at $102,000-$104,000. This zone represents an area where strong selling previously occurred, creating an imbalance.
Golden Zone (Fibonacci Retracement): Located around $101,000-$103,000, this area aligns with the 61.8%-78.6% retracement levels and offers a high-probability reversal opportunity.
Weak High: The high near $104,000 represents untapped liquidity, which smart money may target for a liquidity grab before reversing lower.
Equal Lows (EQL): Around $92,000, these act as a bearish target where liquidity rests, aligning with the continuation of the bearish trend.
Confluences for Short Entry:
Price is approaching the supply zone and Fibonacci Golden Zone, indicating a potential reversal point.
The weak high may trigger a liquidity grab to entice buyers before sellers regain control.
Previous BOS and trendline resistance add further validation to the bearish bias.
Trade Plan:
Short Entry Setup:
Entry Zone: $102,000-$104,000 (inside the supply zone and Golden Zone).
Stop Loss (SL): $105,500 (above the supply zone and imbalance to account for liquidity grabs).
Take Profit Levels:
TP1: $97,000 – Close partial profits at this imbalance mitigation level.
TP2: $92,000 – Target the equal lows and resting liquidity.
TP3: $88,000 – Final target near the blue demand zone for maximum reward.
Risk-Reward Ratio:
With the entry at $103,000 (midpoint of supply), SL at $105,500, and TP at $92,000, the trade offers a 1:4 RR or better, depending on execution and scaling.
Additional Notes:
Monitor the price action closely as BTC approaches the supply zone for confirmation, such as bearish candlestick patterns or lower timeframe CHoCH (Change of Character).
Scaling into the trade in smaller portions across the supply zone can improve overall entry precision.
Adjust stop loss or take profit levels as market conditions evolve
This analysis identifies a high-probability short opportunity for BTCUSD on the 1D timeframe using the Smart Money Concepts (SMC) framework. The chart shows clear bearish confluences, including market structure, supply zones, liquidity levels, and Fibonacci retracement zones. I believe the current bullish momentum is merely a manipulation driven by inflation news and the upcoming Trump inauguration. Following these events, I anticipate a significant market correction. Here’s the detailed breakdown and trade plan:
Analysis:
Market Structure:
Break of Structure (BOS): Price has confirmed a bearish trend with BOS to the downside, signaling a continuation of lower highs and lower lows.
Trendline Resistance: A well-defined downward trendline indicates selling pressure, reinforcing the bearish bias.
Key Zones and Liquidity:
Supply Zone: Highlighted in purple at $102,000-$104,000. This zone represents an area where strong selling previously occurred, creating an imbalance.
Golden Zone (Fibonacci Retracement): Located around $101,000-$103,000, this area aligns with the 61.8%-78.6% retracement levels and offers a high-probability reversal opportunity.
Weak High: The high near $104,000 represents untapped liquidity, which smart money may target for a liquidity grab before reversing lower.
Equal Lows (EQL): Around $92,000, these act as a bearish target where liquidity rests, aligning with the continuation of the bearish trend.
Confluences for Short Entry:
Price is approaching the supply zone and Fibonacci Golden Zone, indicating a potential reversal point.
The weak high may trigger a liquidity grab to entice buyers before sellers regain control.
Previous BOS and trendline resistance add further validation to the bearish bias.
Trade Plan:
Short Entry Setup:
Entry Zone: $102,000-$104,000 (inside the supply zone and Golden Zone).
Stop Loss (SL): $105,500 (above the supply zone and imbalance to account for liquidity grabs).
Take Profit Levels:
TP1: $97,000 – Close partial profits at this imbalance mitigation level.
TP2: $92,000 – Target the equal lows and resting liquidity.
TP3: $88,000 – Final target near the blue demand zone for maximum reward.
Risk-Reward Ratio:
With the entry at $103,000 (midpoint of supply), SL at $105,500, and TP at $92,000, the trade offers a 1:4 RR or better, depending on execution and scaling.
Additional Notes:
Monitor the price action closely as BTC approaches the supply zone for confirmation, such as bearish candlestick patterns or lower timeframe CHoCH (Change of Character).
Scaling into the trade in smaller portions across the supply zone can improve overall entry precision.
Adjust stop loss or take profit levels as market conditions evolve
Note
Note on ATH Sweep:
An All-Time High (ATH) sweep is a significant possibility based on the Smart Money Concepts (SMC) framework. Here's why:
Liquidity Grab Above ATH:
ATHs often hold a large amount of liquidity in the form of stop-loss orders from early sellers and buy-stop orders from breakout traders.
Smart money might push the price above the ATH to trigger these orders, collect liquidity, and then reverse the market.
Potential Manipulation:
The market could exhibit bullish momentum, creating the illusion of a breakout, only to trap late buyers and induce a sharp reversal.
Key Signs to Watch:
A sharp rejection after sweeping the ATH.
A Change of Character (CHoCH) or a Break of Structure (BOS) to the downside on lower timeframes after the sweep.
Presence of a nearby supply zone or an imbalance where the price could react after the sweep.
How to Trade It:
Wait for the ATH sweep and monitor for confirmation signals like bearish engulfing candles, BOS, or CHoCH.
Enter a short position with a stop loss above the sweep high and target the next areas of liquidity (e.g., demand zones or equal lows).
While the current chart suggests bearish confluences, traders should remain vigilant for a potential ATH sweep before a larger correction. This scenario aligns with SMC principles, as smart money seeks to manipulate liquidity zones for optimal order execution.
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