BTC Correction Incoming? Key Support Zones to Monitor
2025-01-10
Category: None

Over the past 50+ days, Bitcoin has been consolidating within a well-defined range, with the all-time high (ATH) at 108K marking the upper boundary and 90K as the lower boundary. The current price action has formed a Head and Shoulders pattern, with the neckline positioned around 90K.

 Volume and Recent Price Action 
 
 Volume has notably decreased compared to the elevated levels seen in November and December 2024, signaling weakening momentum.
 
 
 Price rose significantly to 102.7K, reaching the 0.666 Fibonacci retracement level of the current downtrend, where it faced a sharp rejection. This rejection led Bitcoin to test the lows around 91.5K.
 
 Key Resistance Levels 
 
 97K (POC): The Point of Control (POC) of the current range sits around 97K, which also aligns with the anchored VWAP taken from the all-time high.
 
 
 98.3K (Fib 0.618): The Weekly Open (wOpen) coincides with the 0.618 Fibonacci retracement of the current downward wave, making it a significant resistance level.
 
 
 100K (Psychological Level): A critical psychological barrier, also serving as a key level for setting stop-loss orders for short positions.
 
 Short Trade Setup 
A short position could be built in the range of 97K-98.3K, with the following parameters:
 
 Stop-Loss: Above 100K.
 
 
 Target: 84-80K range.
 
 
 Risk-to-Reward Ratio (R:R): A favorable 3:1 to 4:1, depending on laddered entries.
 
 Key Support Levels and Confluence Zone (80K-83K Region) 
The 80K-83K region stands out as a strong support zone due to multiple confluence factors:

1.) Fib Retracement Levels:
 
 0.618 (82.7K): From the swing low of 67K to the ATH of 108K.
 
 
 0.5 (80.45K): From the broader wave structure (52.5K to 108.35K).
 
 
 Negative Fib -0.618 (81.1K): From the current downward wave.
 
2.) Anchored VWAP: Anchored from 6th September 2024, currently aligning with the 82K level.
3.) ]Fib Speed Fan (0.618): Taken from the low at 52.5K to the ATH, intersecting with the 80-82K region around mid-to-late January.

 Long Trade Setup 
The 80K-83K support zone presents a strong opportunity for a long position for those who missed the previous uptrend:
 
 Entry Zone: Between 80K and 83K.
 
 
 Stop-Loss: Below 78K or lower.
 
 
 Target: 90K, which aligns with the neckline of the Head and Shoulders pattern.
 Risk-to-Reward Ratio (R:R): Approximately 2:1 if entering from the 80K level.
