Bitcoin: A Tactical Long Before the Deeper Correction?

24 ago

After the "fake" update of its ATH, the price of Bitcoin confirmed the formation of a range on the weekly/daily timeframe, as it became clear that the new ATH was just a liquidity sweep of the previous one and a deviation at the top of this range.

Before a new, legitimate ATH is formed, I was expecting a correction on the higher timeframe to the levels I described in my previous global Bitcoin analysis: "Bitcoin's Tumble: How Deep Does the Rabbit Hole Go?". However, Powell's unexpected statement last Friday about a possible interest rate cut in September led to an intensive weakening of the Dollar Index by 1%, pausing Bitcoin's deeper corrective dive and causing its return inside the range.

Just before this news event, the price managed to sweep the external liquidity from the lower boundary of the range (which was essentially a deviation below) and formed a 4H order block in the process. This order block, in conjunction with the 61.8% or 78.6% local retracement levels, can be considered as an intermediate long scenario, with targets at the midline of the range or its upper boundary. I consider the formation of a new ATH from this local POI (the 4H order block) a less probable scenario compared to the instrument still needing a deeper correction first.

The conditions for this local setup to form will be the mitigation of the 4H order block with a concurrent reach of the 61.8% or 78.6% local retracement levels, price finding acceptance above one of them, and the beginning of a bullish order flow on the LTF.

► Invalidation: The invalidation of the long scenario would be a break of the 78.6% level.
► Risk Factor: An important context that could affect the probability of the setup is that liquidity in the form of the Previous Week's Low (PWL) will be formed just below the order block. If the price gets too close to it when reaching the 78.6% level, this liquidity could act as a magnet and pull the price out of the range to the downside, towards the corrective levels from my global analysis.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The principles and conditions for forming the manipulation zones I show in this trade idea are detailed in my educational publication, which was chosen by TradingView for the "Editor's Picks" category and received a huge amount of positive feedback from this insightful trading community. To better understand the logic I've used here and the general principles of price movement in most markets from the perspective of institutional capital, I highly recommend checking out this guide if you haven't already. 👇

P.S. This is not a prediction of the exact price direction. It is a description of high-probability setups that become valid only if specific conditions are met when the price reaches the marked POI. If the conditions are not met, the setups are invalid. No setup has a 100% success rate, so if you decide to use this trade idea, always apply a stop-loss and proper risk management. Trade smart.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
If you found this analysis helpful, support it with a Boost! 🚀

Have a question or your own view on this idea? Share it in the comments. 💬

► Follow me on TradingView for timely updates on THIS idea (entry, targets & live trade management) and not to miss my next detailed breakdown.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

24 ago

Ordine annullato

UPDATE: Bitcoin

The intermediate long scenario was quickly invalidated due to a sharp downward move in Bitcoin, which broke the 4H order block and the local retracement levels.

The price has confirmed its intention for a deeper correction, reaffirming that Friday's rally was based solely on the unforeseen news. Therefore, I am returning to my main, global analysis of Bitcoin with its potential reversal zones at the higher timeframe Fibonacci retracement levels. The first 50% level was just reached by this sharp drop, and now we need to observe if it will hold or if the correction will continue to the next levels.

Future updates on this developing situation will be posted in my main global analysis: