Market Overview: Bitcoin
- Bitcoin is near all-time highs.
- Yet, we don’t see signs of euphoria.
- This is rare when price reaches such key areas.
Bitcoin
The Weekly chart of Bitcoin
- A cup and handle is forming. A cup and handle is “U” form with a pullback on the right side of the U.
- People will soon compare it with the 2021’s cup and handle structure.
- That comparison may look valid for beginners, they will probably expect a catastrophic drawdown from there, they remember the 80% drawdown from 2021.
- Professional analysis shows critical differences. 2021 vs 2025: Key Contrasts
- Pre-cup rally
- 2021: Breakout was parabolic. Price surged 5x from the Covid pattern. It more than tripled in price if measured from prior all-time highs.
- 2025: Breakout was measured. The move from $74,000 to $108,000 was moderate in comparison, it even did not double.
- Drawdown magnitude
- 2021: A 50% drop after forming the cup.
- 2025: Only a 30% pullback, followed by strong demand.
- Bear breakout behavior
- 2021: Aggressive selling, weak bounce.
- 2025: Weak selling, followed by a powerful reversal.
- Leg structure
- 2021: First leg up was soft. The second leg was climatic.
- 2025: First leg already reversed almost the full drop. Strong momentum.
- Sentiment and crowd psychology
- 2021: Hype peaked. “To the moon” memes flooded social media. Retail interest exploded. Fear of Missing Out.
- 2025: Calm environment. Few outside the trading world are paying attention.
- Pre-cup rally
- Handle or Not Yet?
- Right now, the cup is clear.
- The handle is not in place.
- To qualify as a handle, we need some form of a Breakout Mode Pattern, a pause that gives traders a chance to enter with a defined risk.
- This is essential for trade planning.
- Without a price contraction, risk is too wide.
- Current stop distance: about 30%
- So, you may need an additional 30% to just structure a 1:1 trade, with a 50% chance of happening.
- Professionals are not trading when trader’s equation is not positive.
- If a handle appears, traders will buy the breakout of the handle and place their stop below the handle low. The handle low may be as much as 10% from the entry point.
- So they may find an opportunity to structure a 40% chance swing of a 2:1 reward-to-risk ratio.
- If no handle forms and price breaks out cleanly, they will wait for a pullback before entering.
The Daily chart of Bitcoin
- Context and Structure
- Broad bear channel from all-time highs
- Bear breakouts failed to follow through
- At $75,000:
- Re-tested breakout point of 2024’s range
- Filled 2024’s IBIT gap
- Touched 365-day EMA
- Then:
- Breakout above 30-day EMA
- Breakout above neckline of double bottom ($90,000)
- $100,000 tested and broken
- We expected a leg two move.
- What we got was a tight bull channel.
- Is this sustainable?
- Who is buying now?
- The breakout looks exhausted.
- Retail traders may be chasing.
- Professionals are not chasing breakouts.
- They want structure.
- They look for consolidation or to buy at levels where risk is defined. This isn’t it.
- What Are Professionals Doing?
- They’re waiting.
- Two possible scenarios this next week:
- Test to the upside toward the all-time highs
- Test to the downside toward the 30-day EMA
- Most will not trade from here.
- The Bulls want a pullback.
- They want to see weak hands shaken out.
- That gives them better risk/reward.
- Some might trade options. Practical Options Strategy:
- Short a put spread (long) at:
- $100K, $95K, $90K, $85K
- Take profits:
- After a $5,000 move up
- Or if volatility drops sharply right after
- Final Thoughts
- If you see a breakout mode pattern or a proper handle, plan your trade.
- Always define risk.
- Price is bullish, but structure risk matters more.
- Share
- Engage in the comments section! ¿What do you see in the 2025 VS 2021 comparison?
- ¿Do you think there is hype around bitcoin or the crypto space as there was in 2021?
Market analysis reports archive
You can access all the weekend reports on the Market Analysis page.
