Given that everyone missed the "Q4 bottom," this is now the new profound scenario everyone is watching and hoping for.
I mean, if I had been waiting for Q4 and watched price rally the way it has, I would probably be praying for this too. That said, there are many differences between the two.
In 2023, when $BTC rallied to 25K, it created equal high before rejecting. There was no meaningful close above the level, no significant high established above 25K, it simply rejected almost immediately. It only deviated above the local lower high and formed an EQH.
Currently, BTC has created a weekly higher high. That is a completely different shift in market structure. We are now ranging above the previous highs that were flipped, which is a very different dynamic to 2023. On top of that, the bear market drawdown was roughly 77% in that cycle, whereas this one was around 54%.
If we apply the same logic of diminishing returns and shallower retests, the largest pullbacks during this bull market are likely closer to 10-15% all the way up to 126K.
A 10% drop brings BTC to roughly 78K. A 15% drop brings it to around 74K. So even if we followed this fractal identically, it would not necessarily produce the meaningful sweep below the lows that we saw in 2023. The fractal cannot mirror perfectly, even if price retraces below the prior range high.
Regardless, I’m sure a large number of sidelined traders would love the opportunity to long the area they missed. The market has a funny way of not giving people exactly what they want.
With OI reset and price ranging above prior highs, the market looks healthy to me. This is not the scenario I am positioning for; I am still looking towards the 90Ks.
Just thought I would comment on it, as I am seeing this everywhere, exactly like when everyone was waiting for the bottom in Q4.
Bitcoin pumped 4% last week and closed at $84,445, its highest weekly close in 8 months and second consecutive close above the Weekly MA 50.
So how did Bitcoin go from $57K to $87K?
BTC spent 11 weeks testing the Weekly MA 200 and it held as support. During that time, MACD turned bullish, RSI showed a bullish divergence and momentum started shifting toward bulls.
Then BTC broke above $67K and spent the next 4 weeks testing the Weekly MA 50, while $75K held as support.
Once Bitcoin finally closed above the Weekly MA 50, another short squeeze pushed BTC above $86K.
Meanwhile, the macro data was also improving: - ISM hit 55.6, a 4 year high. - Russell 2000 broke to a new ATH. - Core inflation cooled toward a 5 year low.
Important levels: - Support: Weekly MA 50 at $77,670 | Daily MA 200 at $71,100 - Resistance: $87K to $98K
Important events this week: - ISM: Thursday - Jobs Friday
If we sweep the PWL, that is where I would look to long. If not and we begin pushing back towards the highs, personally, I would not be looking to short.
Monthly close approaching + quarterly close. Hunts are possible.