Market Video Report: Bitcoin
Duration 9:50 mins.
Summary
This analysis explores Bitcoin’s current market cycle across monthly, weekly, and daily timeframes. While February’s bear breakout suggests an “Always In Short” status, the broader context points toward a major trading range rather than a new bear trend. Key levels include the $50,000 reversal zone and a $70,000–$80,000 fair value magnet.
Transcript
The Monthly Chart: Context and Market Cycle
Looking at the monthly chart, February is closing as a clear bear breakout bar. From a price action perspective, the market has transitioned, and it is now definitively Always In Short. While there may have been some ambiguity back in January, the close of this month has removed that doubt. However, as professional traders, we must ask ourselves: is this actually a favorable context for the bears to initiate new positions?
The price has currently reached the 2021 higher highs, and we are effectively testing those previous breakout points. Furthermore, we are testing the apex of the 2024 bull flag. In technical analysis, these levels act as a magnet, drawing price toward them. Many traders are wondering if we are destined for a second leg down—which is a very common expectation after an “Always In Short” flip.
Despite this, I would argue that the context does not strictly favor the bears here. We must remember that this price action follows an exceptionally strong bull trend that lasted from the 2023 lows all the way to the 2025 highs. When a market transitions out of a trend of that magnitude, it usually evolves into a trading range rather than an immediate, full-scale bear trend.
Consequently, I view this bear breakout simply as a bearish leg within a broader trading range. The “wedge top” pattern we saw during the bull trend appears to be a complex, two-legged move within a major trading range, and I believe we are currently nearing the lows of that range. While lower prices are possible, the most likely scenario—should we continue to drop—is a reversal upward from the $50,000 area.
I’ve marked a grey area on the chart, representing a significant gap between the 2024 bull flag breakout point and the first monthly pullback after we initially tested the $100,000 level. Gaps of this size often become “areas of agreement” or fair value. I expect the primary magnet on this chart to be the midpoint of this grey area. Generally speaking, I perceive anything below that zone as “cheap” and anything above it as “expensive.”
As a professional, I must emphasize that we adapt to new information rather than trying to predict the future. Interpreting this chart tells me that, currently, there is not a positive trader’s equation in shorting this specific structure.
The Weekly Chart: The “ii” Setup
Moving over to the weekly chart, Bitcoin reached the 2024 trading range apex a few weeks ago during a strong bear breakout cycle. We are also seeing a second leg down from the all-time highs.
During the formation of this second leg, a massive gap was created—noted here in grey. When gaps are this large and the broader context doesn’t favor a sustained bear trend, these levels become pivotal. I suspect price will gravitate between $70,000 and $80,000 for some time.
Recently, we’ve seen the price move sideways for a couple of weeks, forming an inside-inside (ii) pattern. In price action trading, an “ii” pattern following a bear breakout serves as both a buy and a sell signal. The trigger occurs when the price trades either above or below the second inside bar. This week, we saw the price trade below that bar, triggering the short.
Under this “Brooks price action setup,” the stop loss is placed at the high of the first inside bar. With a 2-to-1 reward-to-risk ratio and a 50% probability, the trader’s equation remains positive.
A Note on Education: Al Brooks covers many of these algorithms in the Brooks Trading Course, teaching you how to apply them within the proper context. If you purchase the course through my affiliate link in the description and send your invoice to [email protected], I will provide you with a free private coaching session to help you master these concepts.
Back to the chart: the 2:1 target sits right at that major higher low. If price reaches that level, there is a high probability of a strong reversal upward. However, remember this is a 50/50 scenario; there is an equal chance this setup fails.
In a bearish scenario, if we see a reversal from the $50,000 area, I would expect a 25,000-point move back to the upside. Conversely, the bullish scenario triggers if we break above the high of the first inside bar—essentially where the bears’ stop losses are located. For the bulls, the stop would be at the low of this week’s bear attempt. A 2:1 reward-to-risk target for the bulls would land us in the middle of the bear flags above, which is a natural magnet. However, given the strength of the recent bear breakout, I expect significant resistance at the breakout point near $90,000, where many bulls are likely trapped.
The Daily Chart: Navigating the Tight Trading Range
Finally, the daily chart currently resembles a tight trading range. Last week, we saw triangle-like behavior—breakdowns followed by reversals—which is classic, confusing trading range price action.
In these environments, prices tend to reverse from the extremes. We are currently testing the lower boundary. You’ll notice a green zone I’ve marked where a long tail was formed by a very fast move. This indicates that, at that time, no one was interested in selling that low. This is an area of interest for lower timeframes. If I see the market flip to Always In Long on a 15-minute or 1-hour chart after testing this zone, I will look to structure a long trade targeting the opposite side of the range.
For those considering a bear breakout of this range, I believe the bears need to close multiple bars below that support line before a short can be trusted. If we do reverse up, the “surprise bull breakout high” serves as our upper extreme.
Lastly, there is a red zone on this chart representing a breakaway gap. This is formidable resistance. I will be watching it closely for a potential reversal down if price ever returns there, though that is currently quite far from where we are trading today.
Thank you for watching. If you found this analysis helpful, please leave a like and share your thoughts in the comments—I do my best to answer every question. We have plenty of free educational content on this channel, so be sure to subscribe so you don’t miss the next update.
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Joesph, I love your analysis. Always have, your insight is very helpful in determining what’s going on in the mkt. I don’t trade crypto however, just wish you would do the emini analysis. Maybe you do somewhere else. If so please let me know. Thanks