BTCUSD Rectangle Pattern Breakout + Bearish Retest & Target🧩 Chart Overview
This chart captures a well-defined rectangle continuation pattern forming within a rising channel on the 1-hour timeframe. This setup is a classic combination of horizontal and diagonal price structure interaction, offering valuable insights into potential market behavior and trade opportunities.
🧱 Structure Breakdown
Rectangle Pattern: Price action was trapped in a sideways consolidation phase between the resistance zone (~104,800 - 105,400) and the support zone (~101,200 - 101,800).
This rectangle followed a strong bullish rally, which often implies a continuation pattern. However, the lack of follow-through from bulls near the resistance led to repeated failures to break out, suggesting weakening momentum.
Rising Channel: Within this rectangle, price respected a rising trendline support and resistance structure, forming a parallel ascending channel.
Bearish Breakout: The significant event occurred when BTC broke down below both the horizontal support of the rectangle and the lower boundary of the rising channel, triggering a structural shift from bullish to bearish.
🔁 Retesting Phase – What’s Happening Now
After the breakdown:
Price pulled back toward the prior support zone, which is now acting as resistance (a classic example of the support-turns-resistance principle).
This is commonly referred to as a retest, which validates the breakout and offers a lower-risk entry point for traders looking to short.
The retest area (around 101,500 - 102,000) is crucial. If price fails to reclaim this level and prints bearish confirmation (e.g., rejection wick, bearish engulfing candle), it increases the probability of downward continuation.
🎯 Trade Setup (Short Bias)
Entry Zone: 101,500 – 102,000 (on retest rejection confirmation)
Stop Loss: Above 103,000 (above prior highs and invalidation point)
Target 1 (TP1): 99,347 – key psychological and horizontal support level from prior structure
Target 2 (TP2): 97,277 – measured move of the rectangle height projected downward, aligning with previous demand area
This setup offers an attractive risk-to-reward ratio, assuming proper trade management and confirmation-based entry.
📊 Additional Technical Confluences
Bearish Momentum: The aggressive breakdown candle shows strong seller interest and increased volatility.
Volume: If confirmed with high selling volume during the breakdown and low buying volume during the retest, the move gains more credibility.
Trend Reversal Signals: The break of the channel and the rectangle support indicates potential trend reversal from short-term bullish to bearish.
RSI & Momentum Indicators (optional): Traders may use tools like RSI or MACD to confirm momentum shifts during retest.
📉 Psychological and Price-Level Significance
101,500 was a strong intraday support zone throughout the consolidation phase. Once broken, it flips polarity and acts as resistance.
The round-number level of 100,000 is always a psychological magnet for BTC. It often acts as a bounce or breakout zone, so traders should watch price behavior near this area closely.
Deeper demand may emerge around 97,000 – 96,500, which can serve as an extended target or reaccumulation zone depending on broader market conditions.
⚠️ Risk Management & Final Thoughts
This setup is high-probability only if the retest confirms rejection. Avoid early entries or assumptions before confirmation.
Always use proper stop-loss placement to avoid whipsaws or fake-outs.
Manage position sizing based on account size and risk tolerance.
News events or macro data can override technicals, so be aware of upcoming economic releases or sentiment shifts.
🧵 Conclusion
Bitcoin is showing clear signs of short-term weakness following the breakdown of a long-standing consolidation range within a rising channel. The ongoing retest provides an ideal area for short positioning, with clearly defined invalidation and profit targets.
✅ If bears defend the retest zone, expect downside continuation toward 99.3K and possibly 97.2K.
