Market Video Report: Bitcoin
Duration 9:47 mins. AI is voicing Josep Capo’s original script.
Summary
Following a significant selloff last week, Bitcoin formed a weekly inside bar, signaling a period of market indecision. The lack of both a sharp reversal up or further bear continuation suggests that immediate volatility may subside. Based on current data, I anticipate a period of consolidation, with price likely stabilizing within a $70,000 – $80,000 range over the next month or two.
Transcript
Hi everyone, welcome back to this week’s Bitcoin price action analysis. My name is Josep Capo, and I’m a Price Action Trader and an author for the Brooks Trading Course website. Thank you for joining us as we take a look at Bitcoin on both the weekly and daily charts.
Last week was incredibly intense for the cryptocurrency space, and our Bitcoin weekly video report reflected that urgency. We were analyzing the market in real-time while things were “hot,” and we covered some critical structural developments that are now coming to fruition. If you haven’t had a chance to watch that previous report, I strongly encourage you to revisit it. There were specific details regarding the institutional landscape and price levels that provide the necessary context for what we are seeing today.
The Weekly Chart
When we look at the Weekly Chart, the primary debate among professional traders right now is centered on one question: Are we witnessing the start of a major bear trend, or are we simply defining a major trading range?
The implications here are significant. If this is a bear trend, we should expect to see one or perhaps two more substantial legs to the downside. However, if this is a trading range, we would expect a bull leg to begin relatively soon—likely within the next ten bars, which translates to a couple of months of price action.
The “Two Legs Down” Thesis
My standing thesis has been that this movement is a “two legs down” pattern within a larger trading range. Because the second leg has shown such considerable strength, there is a possibility we could see one more small push lower. That said, I firmly believe there are buyers waiting below last week’s low.
What is interesting—and perhaps a bit cautious for the bulls—is that this week the price traded mostly within the prior “gray area.” Instead of a direct, aggressive move upward toward the original breakout point, the price lingered. This suggests that there are still active sellers in this immediate vicinity.
Key Levels and the $90,000 Target
The argument for a new bull leg will gain significant weight if the price can trade above the 2024 trading range and sustain several bars of closing prices above that level. Currently, there is a “gap” between the 2024 trading range breakout point and the current bearish breakout point. I suspect the market may gravitate within this gap for several weeks.
While the main upper target remains the $90,000 area, I believe the space between $70,000 and $80,000 will act as a magnet. Why? Because the apex of the 2024 breakout point represents a level of previous acceptance, and the overlap near $90,000 is also considered a “fair price.” When you have two strong, competing levels like these, the market tends to oscillate between them.
Why Sideways is the Most Likely Path
In this scenario, bulls are fighting for a bull leg, and bears are fighting for another bear leg. Usually, when a large gap like this forms, both sides fail to get immediate gratification. Instead, the market begins to frustrate everyone by going sideways. We will likely see a test of the $80,000 area, followed by a move back down to test $65,000, and then back up again.
This behavior occurs because:
- For the Bulls: They have to push significantly higher to prove the market is no longer bearish.
- For the Bears: They are looking at a massive support structure to the left. Breaking through that 2024 trading range and consolidating below it is an extremely difficult task.
Consequently, based on the current information, my expectation is for sideways price action for the next couple of months.
The Daily Chart: Climatic Behavior and Trapped Traders
Moving down to the Daily Chart, we recently reached the measured move target of the full previous trading range. Back when Bitcoin was trading at $90,000, I mentioned that the price was likely to test the opposite side of the range and the lower low. It did exactly that and more, plunging toward the major magnets at $75,000 and $65,000.
The Climatic Exhaustion
Interestingly, we saw a massive bear bar late in a very tight bear channel. Following the principles of Al Brooks, when you see the largest bear bar in a trend that has lasted roughly 20 bars, it is often climatic. This means the bar represents an exhaustive “sell-off” rather than the start of a new move. Instead of more selling, that bar was met with buying—likely from bears who were covering their shorts and taking profits at the measured move target.
Current Price Action
While I initially expected the market to trade sideways-to-up this week, it actually moved sideways-to-down. This is disappointing for the bulls, as it indicates a lack of strong rejection at these lows. It has become clear that bears are selling any bars that attempt to climb above $70,000, which proves that bearish pressure remains present.
If the price does manage to move higher from here, it will leave those bears trapped at these lower levels. This would turn this current zone into a magnet for the future; if we go up, it’s a “see you later” to these prices, not a “goodbye.”
The Verdict
Until the bulls can prove the bears wrong by trading above last Sunday’s high, the bears still have the opportunity to test lower prices—perhaps even exploring levels below $60,000.
Because we are stuck between these competing forces, I do not believe this is an ideal environment to initiate new trades. Professional traders should exercise patience here and wait for the market to show its hand by consolidating either clearly above or clearly below this week’s range.
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