Market Video Report: Bitcoin
Duration 7:09 mins. AI is voicing Josep Capo’s original script.
Summary
The market remains always-in short within a tight bear channel on the medium-term cycle, all inside a major trading range. Current levels appeal to short-term bears but attract medium-term bulls.
Transcript
Hi everyone, welcome to this week’s video where we analyze Bitcoin’s price action on both the weekly and daily charts. My name is Josep Capo, and I’m a Price Action Trader as well as an author for the Brooks Trading Course website.
Let’s start with the weekly chart. This week delivered the smallest weekly range since September, which signals clear compression in price movement. As traders, we appreciate compression because it is a breakout mode pattern in a lower timeframe and the may be preparing for a significant move.
Overall, the market remains always-in short and inside a tight bear channel within the current market cycle. However, there’s an important nuance here: because price has already traded through this area in the past and was heavily bought, this tight bear channel is more likely to be just one leg within a broader trading range market cycle rather than the beginning of a sustained bear trend.
As I’ve mentioned several times throughout these years, Bitcoin has evolved significantly. With the approval of the first Bitcoin ETFs by the Securities and Exchange Commission early last year, many funds now maintain fixed exposure to Bitcoin, and a large number of investors—whether indirectly or through small percentages of their portfolios—are involved. This shift means Bitcoin is increasingly held by long-term investors and is less dependent on short-term or highly leveraged traders. That institutional participation should, over time, bring greater stability to the price.
Looking closely at the price action itself, this tight bear channel does not appear particularly strong. The bars lack uniformity in size, there are numerous tails on, and only one bear bar shows a body larger than 50%. Overall, it looks exhaustive rather than convincingly bearish. While a tight bear channel should provide bearish inertia, we’re now near a support area where traders are reluctant to sell aggressively. Those sellers who wisely shorted higher up are likely viewing this level as an opportunity to take profits, reduce positions, or close shorts entirely.
When Bitcoin was declining sharply and approaching $80,000, I pointed out that it made sense to construct a 45-day-to-expiration bull put spread. The reasoning was straightforward: price would either find support and move sideways, or transition directly into sideways-to-upward action. Traders always prioritize risk first, so the spread was designed to limit downside exposure in case of a deeper penetration lower. In my view, it represented a high-probability setup with a positive trader’s equation, and my teammates on the trading team knew I was committed to executing that trade.
In recent weeks, price has indeed moved sideways to slightly higher, giving ample time to profit from time decay, direction, and volatility compression. Even now, I believe the structure continues to support that approach.
All of this leads me to conclude that, even if we see another leg down—and that remains possible given the bear breakout, the failed bull reversal attempts, and the inability of bulls to produce two consecutive strong bull bars or close above prior highs—the downside should remain limited. Selling below this week’s low, particularly if this week’s candlestick closes near the low, would create a Low 2 setup with tight risk above the weekly bar and potential for at least 2R to the downside—a setup that still offers a positive trader’s equation, though with low probability. Importantly, even a sizable move lower would likely be bought again, reinforcing my view that we won’t see substantially lower prices from here.
I’m not certain whether we’ll test the 365-day moving average this year or during the first quarter of 2026, but remember we’re operating inside a trading range. In trading ranges, price naturally gravitates toward the mean, and the 365-day moving average serves as an excellent proxy for that mean within the current macro trading range market cycle.
Before we move to the daily chart, I want to mention once again the strong interest many of you have shown in a Bitcoin trading room. We’ve received very positive feedback each time we’ve raised the idea, and we’ll soon make a decision. If you have any suggestions, please share them—we genuinely want to hear from you. We’re currently considering adding hours during the midday European session, which would allow Brooks Price Action students from Europe and Asia to participate (evening hours for those in Asia), along with a slot during the United States session. Your input will help us structure something valuable.
For now, we are posting 2 to 3 videos per week analyzing the end of day of an intraday bitcoin chart, either using the 24-hour format and a 15-min timeframe chart, or a United States session format using the 5-minute timeframe chart.
Now, let’s examine the daily chart. This week, price has remained sideways within a tight range, mirroring the compression we observed on the weekly timeframe. The daily candles have simply oscillated up and down without providing any reliable directional signal.
The compression is especially evident here. As I’ve discussed in previous videos—and I encourage you to watch the most recent one if you haven’t—the area above us contains a trapped bull zone marked by those red lines. Those levels represent prices where bulls previously bought aggressively and are still holding losing positions. Such areas tend to act as magnets; price often returns to them, and traders watch closely for potential reversals, particularly if the upward momentum appears weak in the short-term context.
At present, the probability of moving lower rather than higher is slightly elevated. Bulls have not demonstrated strength above the 30-day moving average and failed to sustain price there. Consequently, bulls will feel more comfortable buying if bears prove unable to keep price convincingly below that moving average. They’ll also gain confidence buying near the higher-timeframe support area.
If price does decline into the green zone below, this current tight trading range would retrospectively resemble a final flag. Traders sometimes find it challenging to distinguish whether a tight trading range inside a bear trend is a standard bear flag or a final flag. As you may know, the final flag is one of Al Brooks’ 10 best patterns—feel free to read his article on that in the “Learn to Trade” section by clicking “10 Best Patterns.” In truth, we can never know with certainty in real time whether a pattern is truly “final,” but when strong support is present and the move feels late in the trend for various reasons, waiting for a bear breakout to fail and then betting on reversal up becomes a reasonable approach.
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