Market Overview: Bitcoin
- As of the June 2025 close, Bitcoin concludes Q2 up approximately 25% from the Q1 2025 close.
- This gain reflects profitability for long-term holders.
- The quarter’s strong performance creates favorable conditions for profit-taking.
- Despite profit-taking, the broader technical and structural outlook remains attractive, especially for newcomers evaluating long exposure.
Bitcoin
The Monthly chart of Bitcoin
- Bitcoin remains firmly within a bull channel market cycle.
- The bullish leg initiated with the October 2023 breakout bar, a strong bullish impulse that was confirmed by November 2023, delivering excellent follow-through.
- After advancing a significant distance, the market underwent a two-legged corrective pullback, as is typical in trending environments.
- The correction tested the 12-month moving average, a critical long-term trend indicator.
- Following this test, the market began a trend resumption, resulting in a second bull breakout that extended up to the $100,000 psychological resistance.
- At the $100K level, resistance was expected due to a combination of factors:
- The measured move projection based on the height of the preceding pullback
- The climactic characteristics of the second leg of the bull move
- The symbolic and psychological pressure of first time touching a six-figure round number
- The price went from the $100K area and tested the breakout point, the high of the preceding pullback. Then the price reversed up and reached, recently, all-time highs.
- Crucially, this test did not result in an overlap, meaning the breakout gap is open.
- Breakout gaps that remain open are a key feature of strong trends.
- Reversals against strong trends fail approximately 80% of the time.
- This statistical edge reflects that strong trends tend to have four or more legs before undergoing a major reversal.
- These legs do not need to be symmetrical.
- The open gap strengthens this strong bull trend thesis.
- Provided price does not close the gap or transition into a tight trading range, the bull channel scenario remains the dominant probability.
- Should the gap eventually close, that would imply a transition to a broader trading range, but this is not discussed yet given current evidence.
- The focus remains on continuation within the bull channel context.
- In recent commentary during the bull micro-channel on the weekly chart, it was noted that buying directly above the previous all-time high was not advisable due to excessive stop distance (30%).
- A more favorable setup would involve a pullback to form a handle, essentially, a price compression.
- June is at the time of the writing an inside bar, representing a High 1 setup.
- This pattern allows for a tighter stop-loss structure, traders entering above June’s high can set stops below June’s low, resulting in around a 10% stop, far more reasonable than previous entries.
- If either the final days of June or early July produces a bull breakout above June’s high, momentum buyers are likely to enter.
- Bulls will require July to close as a bull bar, ideally above the all-time high.
- A strong July close would confirm trend continuation and further validate the breakout’s strength.
- Bulls are targeting the $120,000 level, which aligns with a measured move based on the 2021–2022 drawdown.
- This is a reasonable and visible magnet for “short-term” (1 to 4 bars) price action.
- Bitcoin appears to be in the third leg of the ongoing bull trend.
- Third legs in strong bull channels typically present reduced reward-to-risk ratios for new swing trades.
- As such, swing traders prefer to initiate positions during the second leg, when breakout risk is lower and reward is higher.
- At this stage, tactical trades (scalps) toward the $120K level are more appropriate.
- In conclusion:
- The market is still in a strong bull trend.
- The open breakout gap confirms strength and favors continuation.
- Strong trends typically produce multiple legs (4+) before major reversal.
- Current conditions support bullish bias, with $120,000 acting as the near-term magnet.
The Weekly chart of Bitcoin
- Bitcoin spent most of 2024 (~8 months) in a trading range.
- Eventually, price broke out above the range’s high and completed a measured move upward.
- In early 2025, a double top structure formed, followed by a strong bear surprise bar, initiating an “always in short” market.
- Based on the strength of the bear bar, a second leg down or sideways was the expected development.
- Bear follow-through was limited:
- Large lower tail on the bar preceding the surprise, showing strong buying below
- Price action quickly re-entered the double top zone and closed the breakout gap
- These actions indicated that bears were unable to dominate.
- The 12-month MA provided support and coincided with the 2024 breakout level, a critical confluence support zone.
- In Q1 2025, institutional rebalancing flows were anticipated:
- Price had retraced ~30% from Q4 2024 highs
- This likely triggered buy programs and reallocations, reinforcing technical support
- A textbook High 3 pattern developed — a classic pullback formation in an uptrend.
- A few weeks later, a strong bull bar closed above the 3-month moving average, flipping the market bias from “always in short” to “always in long.”
- The market fully recovered the prior bearish drawdown.
- The price action formed a cup and handle.
- Markets resist behavioral regime shifts, and once a bull trend resumes, major reversals are difficult.
- The first pullback in a resumed bull leg usually fails to reverse the trend, increasing odds for a successful continuation, which means, increased odds of another bull leg.
- Market formed a sideways-to-down pullback, culminating in a Low 2 setup that triggered last week.
- However:
- Bearish odds were weak
- Context was not conducive to aggressive shorting
- Trader’s equation did not favor downside setups
- Bulls are now expecting a bull breakout of the pullback.
- The measured move from the higher timeframe still points to $120K.
- As stated previously, limit order bulls may scale into the pullback, potentially as deep as a 50% retracement, assuming trend context remains intact.
- A 50% retracement would:
- Challenge the current bull trend narrative
- Increase substantially the probability of a transition into a trading range market
- The Market remains in a tight bull channel on the weekly chart.
- Based on structure and recent price action, it will likely:
- Continue upward into a fresh bull leg, or
- Transition into a trading range.
- This week’s strong bull bar represents a reasonable buy signal.
- Entering with a stop order above the bull bar is justified by context.
- A higher-probability entry is a stop order above the all-time high.
- Logical stop placement is below the two legged pullback low.
- On a weekly timeframe, position should target 2x the initial risk.
- Bitcoin remains in a technically strong position across both monthly and weekly charts.
- The structure supports trend continuation, with $120,000 acting as the bull magnet.
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