Bitcoin technical analysis + trade planThe chart shows a clear falling wedge formation. This is a bullish reversal pattern that suggests a potential upward breakout.
Price is nearing the wedge's apex, indicating that a breakout might be imminent.
Key Support and Resistance Levels:
Support Levels:
$88,671.83 (near-term critical support)
$86,000.00 (strong psychological support)
Resistance Levels:
$95,497.11 (short-term resistance near breakout zone)
$108,329.96 (target resistance post-breakout)
Indicators:
VWMC Cipher B Divergences:
Bullish divergence appears on the indicator, aligning with the falling wedge's bullish potential.
RSI:
RSI is below 30, indicating oversold conditions, which often precede a rebound.
Money Flow Index (MFI):
MFI is oversold, suggesting incoming buying pressure.
Stochastic Oscillator:
Stochastic is in the oversold region (<20), showing high potential for a bullish reversal.
Market Sentiment:
Given the oversold indicators and bullish pattern, the market is primed for a potential upside movement. However, confirmation of the breakout is critical.
Trading Plan:
Entry Strategy:
Enter long near the wedge's lower boundary (~$90,000), with a tight stop loss below $88,000.
Conservative Entry:
Wait for a breakout above the wedge's resistance (~$96,000) and enter after confirmation with a retest of the breakout level.
Stop-Loss Placement:
Place stop-loss below the nearest support level:
Aggressive traders: $87,500
Conservative traders: $92,000 (post-breakout retest failure)
Profit Targets:
First Target: $108,329.96 (major resistance level post-breakout)
Second Target: $114,000 (psychological level, based on historical price action)
Risk Management:
Risk no more than 1-2% of your portfolio per trade.
Use position sizing to balance risk-to-reward ratios (minimum 1:3).
Monitoring
Volume: Ensure the breakout is accompanied by increased volume.
Candle Structure: A solid close above $96,000 validates the move.
Invalidation:
If the price falls below $88,000, the wedge pattern is invalidated, signaling further downside.
Alternative Scenario (Bearish):
If Bitcoin breaks below $86,000, expect a test of lower levels. Potential targets include $82,000 and $78,000.
Bitcoin is poised for a significant move. The falling wedge, oversold indicators, and strong support levels suggest an imminent bullish breakout. However, patience for confirmation is key to minimizing risk and maximizing gains. Adjust your strategy dynamically based on market conditions.
