Bitcoin: Short into the Real Bull Market Market sentiment has plummeted to unprecedented lows as Bitcoin approaches critical support zones around the $80K level, coinciding with the CME futures gap.
While I have outlined a potential bullish scenario, I remain cognizant of the significant downside risks. A sharp decline could unfold, instilling widespread fear among market participants before the true bull market takes shape.
Above, I have illustrated a bullish harmonic pattern, a structure characterized by price contraction followed by an eventual expansion. This formation suggests a retracement to the 0.618 Fibonacci levels of both the prevailing uptrend and the resistance formed by the downtrend.
What particularly draws my attention is the positioning of the Point of Control (POC)—the most actively traded price within the previous range. This key level represents an area where price may face rejection from the broader value zone.
From a psychological standpoint, such a move would create an illusion of stability as Bitcoin retraces toward the $96K– GETTEX:98K region, enticing investors who anticipate a break above $100K and a push toward new all-time highs. However, this very zone could serve as a major liquidity exit point for larger players looking to offload positions and potentially establish short positions against the market.
Should this scenario materialize, the likelihood of the harmonic pattern playing out increases, potentially leading to the loss of the value area and forcing Bitcoin to revisit previously established support, where it traded in the value area around the $60K range.
This sharp decline would likely convince many that the bull market has ended, triggering an influx of short positions. However, such a setup could ultimately serve as a bear trap, culminating in a dramatic short squeeze and marking the true inception of the next bull run.
A decisive reclaim above the POC and key confluence zones would significantly enhance the probability of revisiting all-time highs. Nonetheless, I will be closely monitoring the critical levels detailed in my journal for signs of a broader market reversal.
Only time will tell...
