Professional Technical Analysis for Bitcoin + trade plan
2025-01-06
Category: None

Technical Analysis for Bitcoin (BTC/USDT)

Resistance Level:

The red trendline indicates a strong resistance around $100,000 to $100,500.
Bitcoin has tested this resistance and is showing signs of a possible reversal.

Support Levels:

Immediate support is around $98,000 (green horizontal line).
Stronger support is in the orange zone between $96,000 and $97,000.

Volume Analysis:

Volume spikes are visible during resistance testing, suggesting selling pressure near $100,000.

Indicators:

VMC Cipher B Divergences: Showing bearish momentum divergence at the peak, indicating potential downward pressure.

RSI (Relative Strength Index): Around 67, nearing overbought territory but not yet overextended.

Money Flow Index (MFI): Indicates mild outflows, confirming weakening buying pressure.

Stochastic RSI: Overbought levels, crossing downwards, further supporting a short-term pullback.

Price Action:

The price has been forming higher highs and higher lows, but the rejection from resistance hints at a temporary retracement.
The projection shows a potential dip into the support zone ($96,000–$97,000) before resuming an uptrend.

 Trading Plan 

 Short-Term Trading Plan: 

Entry Point:

Wait for Bitcoin to retrace into the orange support zone ($96,000–$97,000).
Place a buy limit order within this zone to capitalize on the anticipated bounce.
Stop-Loss:

Set a stop-loss slightly below $95,500 to mitigate risk in case the price breaks key support.

Take-Profit Targets:

First Target: $100,000 (resistance retest).
Second Target: $103,000 (continuation breakout above resistance).
Risk-Reward Ratio:

Maintain a minimum risk-to-reward ratio of 1:3 for this trade.

 Medium-Term Trading Plan: 

Scenario 1: Bullish Breakout

If Bitcoin breaks above $100,500 with high volume, enter a momentum trade targeting $103,000–$105,000.
Use trailing stop-loss to secure profits in case of reversal.

Scenario 2: Bearish Breakdown

If Bitcoin closes below $96,000 with increasing volume, consider a short position targeting $93,000 as the next major support.

Key Trading Notes:
Monitor market sentiment and news, as fundamental factors can influence Bitcoin’s direction.
Watch for divergences in the indicators (e.g., RSI, VMC Cipher) for early signs of trend reversals.
Adjust position sizing based on risk tolerance and volatility in the crypto market.
