Bitcoin continues to coil tightly within its range-bound market as the bulls and bears fight it out to see which is most dominant. On the lower time frames (TF), bitcoin is managing to find support:
Figure 1: BTC-USD, 2-Hour Candles, Low TF Support
The zone outlined by the green line in Figure 1 represents local support that has kept the market afloat for the last week and a half. Late last night, we saw another test of this support level has failed to break it thus far. On a macro level, we are in a kind of no-man’s-land, following the bounce off macro support in the mid $3,000s:
Figure 2: BTC-USD, Daily Candles, Macro Support Respected
The blue zone outlined above shows the market respecting the support zone following the high volume rejection from the high established in the low $4,000s. Since we managed to establish support on the low TF and high TF market structures, it seems logical that the next move will be a test of supply in the red-dotted zone shown above. If we zoom out even further to the weekly candles, we can see clearly that this low TF range-bound market is nothing more than a weekly resistance test in an attempt to reclaim macro support:
Figure 3: BTC-USD, Weekly Candles, Weekly Resistance Test
Figure 3 shows a test of the weekly resistance level. So far, we have seen a few tests of the area but nothing that has managed to close above the level. If we can manage to get a weekly close above the level shown above, that would be a very strong, bullish statement to make in the current market structure.
So far, we have been rejected twice, but if we manage to close a weekly candle above the resistance level, this could be a great sign of bearish exhaustion considering that level has been heavily shorted for the last few months. If we can close above the current high that’s been established in the $3,900s, that would be bullish on all TFs down to the hourly candles.
However, if this level gets rejected, it would most likely mean a revisit to the lows in the low $3,000 zone. For now, things are fairly bullish as we maintain support on lower and macro TFs. Look out for a close above the weekly resistance level, as this would indicate a change of character in the market structure.
- Bitcoin managed to establish support with its lower TF range-bound market. This support coincided with a macro support level on the daily candles as well.
- We are currently in between major support and resistance levels, so the market is drifting up and down as the bulls and bears battle it out.
- Macro resistance is being tested for a third time. If we manage to close a weekly candle above this level, that would likely mean bearish exhaustion is failing to suppress the market demand. Look for a close above this level, as this would represent a change in market structure.
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