Bitcoin up to 28k but Limit Order Market and BOM

Market Overview: Bitcoin

Bitcoin up to 28k. On the Weekly chart, the price is contained within a Trading Range Pattern, which is also a Breakout Mode (BOM) pattern. Most good signal bars are not good setups when the price is within a BOM. Until the BOM is not broken, Traders are in stand by mode, unless there still bulls that bought the Breakout of the Head and Shoulders Bottom and still maintain their Stop Loss at the Major Higher Low.

Bitcoin

The Weekly chart of Bitcoin

Past: Support and Resistances

• The price started a Strong Bear Channel:
  • Bear Flag’s Breakout Point.
  • Major Lower High.
• Then, failed a Breakout Below a Bear Flag and Reversed up, forming a HSB (Head and Shoulder Bottom) pattern, that broke up:
  • 2022 Low.
  • 2022s Major Higher Low.
  • 2023 Major Higher Low.
  • HSB Breakout Point
• Lately, the price has been sideways creating a Double Top and a Double Bottom, which is a Trading Range, a small Trading Range (not Tight Trading Range).
  • Trading Range High.
  • Trading Range Low.

Present: Market Cycle

Trading Ranges tend to break when they are exhausted if they are wide, and with a strong Breakout, when they are small like this one.

Future: Inertia

Based upon what we have said during the end of the quarterly report, this first swing up or down will likely fail.

However, usually, there is a 50% chance that the first Breakout of a Trading Range will fail. 50% chance that a Bull or a Bear Breakout will be successful.

At some point, there will be a series of consecutive bull bars, or consecutive bear bars, that will anticipate a swing.

Trading

Traders want a swing up or down, and will probably wait for a couple of strong consecutive bars, one side or the other, before Trading.

The Daily chart of Bitcoin futures

Past: Support and Resistances

• The price started a Strong Bear Breakout of Tight Trading Range:
  • Major Lower High (MLH).
  • August 1st Breakout Point.
• However, soon after, before bears achieved a Measured Move down, bulls did a Bull Surprise but it was a Bull Trap, Scale In Bulls and Bears sold at 50% Pullback. Finally, the price did a 5 Bull Micro Channel that broke above a prior minor Lower High:
  • Major Higher Low (MHL).
• That Bull Leg (Leg 1) was not specially strong, since all Bull Bars had tails at the top. The Bull Leg retraced a 50% and then a Leg 2 surged:
  • Higher Low (HL).
  • Trading Range Apex.

Present: Market Cycle

The market cycle looks like a Trading Range, good bull bars are followed by bear bars or dojis. Good bear bars are followed by bull bars or dojis. Breakouts fail. Traders selling above prior minor highs, or buying below prior minor lows, are making money if they scale in: this is exactly how the price behaves under Trading Range conditions.

Future: Inertia

In Trading Ranges, a Bull Leg is normally followed by a Bear Leg and vice versa. Moreover, the price tends to test the apex of the Trading Range, since it is considered a fair price.

The price just did a Leg 1 = Leg 2 pattern. There might be another Bull Leg (Leg 3) underway, however, the price it is more likely to test down the Trading Range Apex, or the minor Higher Low, than start a strong Bull Trend.

The Major Lower High is a magnet above, there, there is liquidity, bull stop orders, since many bears maintain their Stop Loss over there. If the price keeps rising to the Major Lower High before testing the Apex or the Higher Low, it will probably reverse down from there.

Trading

Most Traders should wait for a Stop Order Market before Trading.

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