#BTC —— What’s next?

Important report on Sunday: Everything you need to know:

🚩 TA / LCA / Psychological breakdown:

Since the report last week, there has been no change, so today’s update is shorter than usual. Last week, we discussed the two main liquidity accumulation points in the 97k and 107k areas, and the importance of setting up short positions in these areas in case market makers allow prices to touch these areas again to seize liquidity. Notably, the 50-day moving average needs to be retested, which aligns perfectly with the first liquidity pool around 99-100k. If we see such a spike in price, it will require significant volatility, which is likely to occur during the Federal Open Market Committee (FOMC) statement on December 10, three days from now.

Currently, the market presents three possible scenarios, some with higher probabilities and some with lower. Trading is a probability game, and if we acknowledge that Bitcoin is in a bear market, we also recognize that prices will occasionally set new lows. But will this happen without any rebounds or pullbacks? Of course not; even in the most severe crashes, the market will never decline straight down without fluctuations. Our next task is to identify the areas where market makers are most likely to guide prices up before reaching the lower target of $70,000.

The first possibility is that market makers directly execute the current bear flag formation, pushing Bitcoin directly towards the target price of $70,000. I believe this possibility exists, but it is not as significant as the second possibility. The second possibility is that market makers acquire liquidity around $97,000 while allowing Bitcoin to re-test the weekly 50-day moving average (EMA50), which is the most important bullish-bearish indicator. The perfect trap is a price breakout above the weekly EMA50. This will trigger strong bullish sentiment, driving Bitcoin up from $100,000 to $107,000, thus accessing the next major liquidity pool. This will allow market makers to establish a larger liquidation cluster below, enabling them to push the price down to below $83,000, once again realizing big short profits.

Some may ask: 'Why not close the short position of $115,000-125,000, go long, and then re-short at $97,000-$100,000 or $107,000?' The answer is simple: market trading is based on probabilities. In my view, at least for the next year, my entry points will not be passive. Whatever happens, these short positions will maintain substantial profits because the entry points are very perfect. I believe the probability of reaching the $70,000 area is extremely high; the only question is how high this false rally can rise before the next downturn. Will it start to decline from the current bear flag structure ($97,000-$100,000)? Or will we see a stronger rally, reaching up to the $107,000 area before continuing to decline? These questions ultimately point to the same answer: the touch of $70,000 will come after one of the aforementioned events occurs.

I am very willing to continue holding a short position of $115,000 to $125,000. If the market presents the aforementioned opportunity, I will add another $100,000 to $107,000. Overall, the fundamentals are extremely pessimistic. The confirmation of the death cross is the biggest danger signal and the ultimate confirmation that many people need. Of course, market sentiment will fluctuate with emotions. People will go all in on the golden cross but ignore the death cross simply because emotions blind them and prevent them from facing reality.

According to the calendar, the Federal Reserve will hold a Federal Open Market Committee (FOMC) meeting on December 10 (Wednesday). 86% of the market expects the Federal Reserve to cut interest rates by 0.25 percentage points, while 14% of the market expects the Federal Reserve not to cut rates. If the Federal Reserve indeed cuts rates, the market has already priced in the rate cut expectations; however, if the Federal Reserve does not cut rates, there will be a strong sell-off in the market, and the bear market will continue.