Market Video Report: Bitcoin
Duration 29:11 mins.
Summary
Bitcoin’s monthly and weekly charts suggest a fair value of $90,000. Although the long-term context favors buyers, the short-term momentum remains bearish with failed breakouts. Trading near these lows carries lower probability for shorts. Awaiting strong bullish structures like double bottoms is preferred.
Transcript
Hello everyone, and welcome back to this week’s Bitcoin price action analysis. My name is Josep Capo, a trader, certified financial advisor, and an author for the Brooks Trading Course. Thank you for joining us today as we take a look at the monthly and weekly charts of Bitcoin.
Analyzing the Monthly Chart & Institutional Participation
Let’s start with the monthly chart of IBIT, the iShares Bitcoin ETF, which is one of the most heavily traded ETFs in the world. I like analyzing this ETF because it represents genuine institutional participation. Since this asset was launched in early January 2024, this chart shows its complete monthly history.
Right from the beginning, we saw a bull breakout followed by consolidation. More importantly, Bitcoin then made a massive bull breakout, consolidating above the previous range and leaving a gap between the new high and the previous low. This is a clear sign of strength; buyers were eager to step in, making the test of the breakout point successful. This price action tells us that market participants viewed the higher prices from the previous consolidation as fair, and perceived anything below that area as cheap.
Eventually, the price attempted another bull breakout but failed, falling back into the previous range. Because it didn’t find many buyers at or above those higher levels, we can infer that participants felt those prices were expensive.
Establishing Fair Value
From this chart, we can conclude that buying below this specific area was perceived as cheap, while selling high around this area was viewed as expensive. Therefore, Bitcoin’s fair value likely sits somewhere in the balance between the two. In trading ranges—where price spends 80 to 90% of its time—the market seeks equilibrium, eventually finding a price where both bulls and bears agree.
Where is that price right now? If I had to guess, it lies somewhere in the middle of these levels, in an area with significant body overlap. The area with the most value should be around $50 on the IBIT chart, which translates to roughly $90,000 in spot Bitcoin. Because I believe Bitcoin’s fair value is near $90,000, the current price—sitting about $10 lower on the ETF—is cheap. This creates a price imbalance that a trader could potentially exploit on the long side.
Short-Term Momentum vs. Long-Term Context
While that is the broader context, shorter-term information shows that momentum has recently been bearish. Over the past half-year, sellers have dominated. They achieved a bear breakout, culminating in a climax bear bar, and established an “always in short” status.
Following this, an inside bar formed. As you know, inside bars represent breakout mode, and they more often than not result in failed breakouts. Indeed, the price traded above it, failed, and then closed near its lows, acting as a bear signal bar for a second leg down. While this offered good follow-through for a bear reversal, the problem is that it occurred too low in the overall context. Selling in an area where prices are perceived as cheap is usually not a good strategy.
Without significant resistance on the left side of the chart, you would typically expect a continuation lower, or at least sideways movement. Instead, the price printed an inside bar with a bullish body, followed by a bull bar that broke above it. Bulls were trying to reach the fair value level of $50, but they are currently failing due to a strong bear reversal bar.
This bar will close on Sunday—I am recording this on Saturday—and if it closes near its lows, it might look like a tempting short because it represents a failed bull breakout. While it could provide a quick scalp down, I would avoid selling here because it’s a third-leg move, which historically has a lower probability of success than the second-leg moves we prefer to trade.
Strategies for Bulls and Bears
What about buying this good bear signal in a buy zone? While it might be a valid idea, it’s not my personal style. I prefer to join the market after seeing a strong bull bar that demonstrates clear strength and intention. Otherwise, you never know how deep the pullback will go.
For bears looking to scale in and structure a position, they might place limit orders below this bull bar or specifically within this gray area on the chart to build a position targeting the $50 mark. In this gray area, you can spot a micro gap between the high of the bear bar and the low of the bull bar. Every time the price visited this zone, it rejected strongly, indicating a lack of interest at those prices. I believe this will be a great opportunity for buyers to join.
While I will wait for buyer initiative, I am sure other traders will start building heavy positions from these levels. Of course, traders doing that must have incredibly strict risk management rules. For beginners, the biggest hurdle is failing to react, sizing positions improperly, and mismanaging risk. Trading is an endeavor where it is critical to be flexible, adapt your context as price moves, and possess the discipline to execute mathematical decisions based on your trading plan.
I deviated a bit from the charts there, but I just love trading concepts!
Average Bar Ranges and Moving Averages
Returning to the charts, even if this setup yields a short scalp, it’s not the best signal for either side right now. Bulls want to buy after a strong bar, so a higher low double bottom would be a much better entry. If the price comes down here and reverses, forming a parabolic wedge bottom (one pullback, two pullback, three), that would be a fantastic signal for a move higher.
I also want to highlight two interesting data points. First is the average bar range. Over the last 10 months, the average bar size was roughly $8.50 on the ETF, which translates to a $15,000 to $17,000 range in spot Bitcoin. This means next month has the potential to either test the lows of this tight bear channel or easily reach the $50 fair value level.
Second is the moving average. Institutions closely follow a 10- or 12-period moving average on higher time frames like the monthly chart. The general rule is to be bullish when the price is above it and bearish when it is below. However, institutions mostly use this on trending indexes like the S&P 500 or NASDAQ. While it is a valuable tool, you must be flexible and understand how to apply it properly to an asset like Bitcoin.
Upcoming Events & Education
Before we move down to the weekly chart, remember that the live trading workshop from Macau 2026 still has spots available. This is a rare opportunity to watch outstanding traders like Al Brooks, Tom Hougaard, Tim Stout, Rose, and Louie Wang trade live.
Also, if you want to learn how to trade and manage risk independently—which is absolutely critical for your success—the Brooks Trading Course is the best resource you will find. I have taken many courses, and nothing compares to it. You can find the link in the description below.
Finally, looking at the weekly chart, we see a two-legged sideways-to-up move. Bitcoin formed a bull microchannel of six bars before a bear bar broke below the previous bar’s low, ending the sequence. We discussed that this could be the initiative bulls need to push toward the $90,000 spot price.
However, the price faced a breakout point and a gap that acted as strong resistance. Anyone who bought near that resistance is now trapped in a bad position. Bulls hoped for a second leg up, but after three strong bear bars closing near their lows, I suspect the price is closer to testing the apex of the trading range or even the previous lows.
Traders fading the bull breakout of a bear flag might also be disappointed by the bullish strength, which could lead to rejection and a potential higher low double bottom. In areas with little past participation, price moves quickly, but when it approaches previous value areas, it tends to pull back or reverse. As a seller, I would prefer to sell higher, perhaps above an outside bar in the direction of the downward reversal.
For the bulls, if they manage to reverse up and test this level, it will likely form a wedge top. Even if the setup looks promising, remember that the fair value zone previously trapped bulls. This means many buyers will be waiting to sell their longs just to break even, creating selling pressure that will likely lead to at least a sideways-to-down move.
If you have any questions about the concepts I shared today, please leave a comment on the YouTube channel. You are also invited to join our community on Discord. I look forward to seeing you next week for another Bitcoin report. Thank you so much for watching, and see you next time!
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
