Market Overview: Bitcoin
- During the previous Bitcoin’s report, we dissected the monthly chart.
- June’s close also sealed Q2 2025; that print is decisive for big-picture bias.
- Funds ran quarter-end rebalancing programs; the first July sessions reveal follow-through and hint at Q3 flow.
- Roughly 25 % Q2 appreciation forces systematic sellers, yet demand still matches supply; no objective evidence that the bull thesis is under siege.
- Higher-timeframe structure stays bullish; bulls for now absorbed the rebalancing dump.
Bitcoin
The Weekly chart of Bitcoin
- Context and Transition
- Bitcoin traded sideways for ~8 months in 2024.
- Price broke above the range high and completed its measured move.
- Early 2025 printed a double-top plus a hard bear surprise bar that flipped the market to “always in short.”
- Given that bear bar’s power, a second leg lower or sideways was the base case.
- Bears failed to extend:
- Big lower tail before the surprise bar signaled weakness.
- Price quickly re-entered the double-top zone and closed the breakout gap.
- Big lower tail before the surprise bar signaled weakness.
- Result: bears never seized clear control.
- The 12-month MA overlapped the 2024 breakout zone, creating a confluence support shelf.
- Bitcoin traded sideways for ~8 months in 2024.
- Shift Back to Long
- Q1 2025: price was off ~30 % from Q4 2024 highs, triggering institutional buy programs during re-allocation.
- A textbook High-3 pattern formed.
- A few weeks later, a strong bull bar closed above the 3-month MA and flipped bias to “always in long.”
- Drawdown fully recovered; price entered a bull micro-channel and printed a cup-and-handle.
- Markets resist regime shifts; resuming a bull trend straight from “always in short” is statistically bullish.
- First pullbacks in a fresh bull leg almost always fail to reverse; odds favor continuation.
- A tight sideways-to-down pause ended with a High-2 buy signal last week.
- Q1 2025: price was off ~30 % from Q4 2024 highs, triggering institutional buy programs during re-allocation.
- High-2 Mechanics and Targets
- High-2 was a legitimate entry trigger.
- Buying 1 tick, above the existing all-time high, carries higher expectancy.
- Bulls eye a bull breakout.
- Monthly measured move objective = $120 000.
- Extension toward $140 000 remains credible: measured move based upon the cup and handle.
- Limit-order bulls may scale into the dip—down to a 50 % retrace—provided trend context survives.
- A 50 % retracement would test the bull narrative and raise the risk of morphing into a trading range.
- High-2 was a legitimate entry trigger.
- What Now
- Market stays in a tight bull channel.
- Pathways:
- Continue into a fresh bull leg, or
- Slide into a trading range.
- Continue into a fresh bull leg, or
- This week’s follow-through bar has not yet closed above the signal bar—less than ideal, but not fatal.
- Give the tape room; it is the first post-Q2 week, and funds are still unloading after the +25 % run.
- Bulls are passing the stress test so far.
- Protective stop of stop-order bulls sit below the June low.
- A limit buy at the 3-month MA is valid, but likely unfilled; most bulls prefer a stop entry above ATH.
- Probabilities:
- 60 % to hit $120 000 before tagging the June low.
- 40 % to reach $130 000 before tagging the June low.
- 60 % to hit $120 000 before tagging the June low.
- Failing back to the June low is possible, not shocking.
- A direct drop to the 12-month MA would surprise, unless achieved via sideways drift first.
- Market stays in a tight bull channel.
The Daily chart of Bitcoin
- Trading Range Anatomy
- The daily chart has moved sideways for almost two months.
- In the prior daily report (two weeks back), the market sat mid-second leg down inside that range.
- Bears wanted a downside breakout and measured move; odds argued against it.
- I suggested studying an options trade structure: bull put spread to fade that bear thesis, relying on strong support at the prior bear leg low.
- Price indeed reversed in a precise two-leg rally from $100 000 to $110 000.
- Counting the bull-trend climax, this marks the 3rd significant bull leg inside the range.
- The daily chart has moved sideways for almost two months.
- Breakout Math
- We now have five legs in total (three bull, two bear). Bull climax of prior Bull Trend should be counted as first leg in the trading range.
- Traders should stop mechanically fading every breakout; the fifth attempt frequently sticks.
- Historical stat: roughly 80 % of breakout attempts fail, so probability tilts toward success after the 4th try.
- Beginners see the range now and attempt buy-low/sell-high scalps just before the inevitable breakout.
- When the break comes it either:
- Starts a new trend, or
- Extends the range without revisiting the original entry (beginners always pay the pain).
- Starts a new trend, or
- We now have five legs in total (three bull, two bear). Bull climax of prior Bull Trend should be counted as first leg in the trading range.
- Strategy Grid for Professionals
- Pros do not guess direction; they stand ready to trade either a bear or bull breakout.
- Options desks look at straddles only after five or more legs and a tight range; current range is too wide, so premium bleed is an issue.
- Without a tight structure, option buyers lose edge (theta); I would stick to directional futures or spot.
- Playbook:
- Buy a breakout with follow-through, or
- Short a failed bull breakout.
- Buy a breakout with follow-through, or
- Place stops at the major higher low for longs and at the major higher high for shorts. Bulls target $120,000. Bears target $100,000
- Pros do not guess direction; they stand ready to trade either a bear or bull breakout.
- Current pricing shows Bitcoin in a technically firm position, despite forced selling from Q2 rebalances.
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