BTC short-term analysis: Key levels
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Let’s start:
It is very interesting to note that actually the market has been consistent with the analysis I had exposed in the last article:
In the last article I had said that Market-Makers would try to keep the price of Bitcoin below the price of $50k at least until Friday 24, the day in which there would be a large expiration of options contracts. The market do exactly that, every time the price tried to go up the liquidations started to bring the price back down to the orange zone (image below).
And now?
Bitcoin right now is exactly in the middle of two Important zones.
Below the current price we have the Weekly POC at 42100$ and the Weekly VAL at 41680$, so two key levels in very close areas, levels that form a very strong support.
Above the current price we have the weekly VAH, the Monthly VAL, and the Monthly POC, all in a very close area, these levels then create a very strong resistance zone.
So we can say with absolute certainty that Bitcoin is still in an accumulation phase, and the price may bounce between these two previously mentioned zones until there is enough liquidity to make the next move.
Remember that an accumulation phase is always followed by a price explosion, this means that the next movement of Bitcoin will be very strong when it breaks one of these two zones, so it is better to wait for this break to enter with a directional trade.
Regarding rebound trades it could be interesting to do a Scalping trade, more precisely a Long trade in the Weekly POC zone, which by the way coincides with a final liquidationof the 25x positions.
All this obviously monitoring in real time if the liquidity has increased in the lower prices, liquidations and volatility of Bitcoin, all this in order to increase the probability of success of the trade and be more sure that the price does not fall below this level.
As for a Short rebound trade, it could be riskier than the previous one, because right above the resistance zone formed by the weekly VAH and the Monthly VAL, a lot of liquidity is forming, so the price could break the resistance levels going to look for the liquidity that is higher.
So it would make more sense to think of a break-out trade, i.e. at the break of the resistance zone formed by the weekly VAH and the Monthly VAL, we could think of making a Long trade with first target up to the Monthly POC (orange line).
The market data are analyzed at the moment that I'm writing, so in case you want to make a trade you should always monitor in real-time the liquidity, liquidations, volatility and the open interest. However in general the key levels are always those and are useful to know how to navigate in the market.
I would like to remind my readers that in the next few days will come out the “Bitcoin Weekly analysis - week 2”, where Bitcoin will be analyzed on a longer-term view and On-chain data will also be analyzed.