Bitcoin July 2023 Double Top in Bull Channel

Market Overview: Bitcoin Futures

Bitcoin Futures July 2023 Double Top in Bull Channel. During the week, the value of a Bitcoin decreased 0.86%. A couple of weeks ago, a bull signal was triggered, but the follow through was not good since it was a doji bar closing below the bull signal close. This week was a bear doji that created a micro double top pattern within a major double top. This is not what bulls were hoping for, still, bears did not close the gap between the price and the bull’s flag breakout point around $27000. Until this gap is not closed, traders should expect buyers below prior bars and sideways to up trading.

Bitcoin futures

The Weekly chart of Bitcoin futures

Analysis

• This week’s candlestick is a bear doji bar. This bar forms a micro double top and a major double top, contained within a bull channel.
• A couple of weeks ago, there was a bull breakout of a bull flag and a bull signal. The price was coming from closing the gap of a head and shoulders bottom (HSB) breakout point, a negative gap since there was not any close below the breakout point. That was good for the bulls.
• However, the bull signal stalled at the resistance of a 50% retracement of 2022’s bear trend around $31650 (not shown in the chart).
• Bulls:
  • Want to reach a Measured Move (MM) based upon the size of the HSB.
  • Ultimately, they want the bull channel to continue up towards the 2022 high.
• Bears:
  • Want a double top at the 50% retracement.
  • They need closes below the bull flag’s breakout point, the May 30th high.
  • Moreover, they want a full reversal of the bull signal triggered a couple of weeks ago. If that happens, the next stop might be the higher low.

Trading

• Swing Bulls:
  • This week’s candlestick is not a good bull signal bar.
  • Bulls that bought the bull signal a couple of weeks ago might exit their trade below a bear bar.
  • Most should trust their stop at the higher low and see what happens when bearish gaps are closed.
• Swing Bears:
  • This week’s candlestick might be an ok signal bar; however, the context is not good for the bears, since the market cycle favor bulls: higher lows and higher highs.

The Daily chart of Bitcoin futures

Analysis

• During the week, the price traded mostly sideways. It reached a new 2023 high and then reversed down.
• The price was coming from breaking up a bull channel. The bull breakout was fair and strong; hence, if there is a reversal down, it will probably be bought. More likely, another leg up will emerge soon.
• Bulls:
  • After a bull breakout, a bull channel is expected. This is what bulls want, a spike and channel bull trend.
  • They do not want closes below the breakout point.
• Bears:
  • They want bear closes below the breakout point.
  • They hope that the price is within a trading range market cycle instead than a within bull channel.
  • Ultimately, they want a full reversal of the bull breakout.
• The price was sideways the past two weeks (10 days). The bulls still have the inertia in their favor.

Trading

• Swing Bulls:
  • Some might buy at the 20 Exponential Moving Average. Others might buy a 50% retracement.
  • The stop loss is the same for both trades: below the major higher low.
• Swing Bears:
  • They need a bear breakout, or a lower high and low.
  • Want to see that bears that sell above the 20 Exponential Moving Average are winning money.

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