BTC/USD at a Crossroads: Will Bulls Take the Reins or Are Bears 
2025-01-14
Category: None

1. Updated Market Structure Overview Yesterday’s analysis proved fruitful as BTC/USDT followed the bearish playbook, breaking the 91,600 support and briefly touching the 90,000 psychological level. Today's session, however, showed a sharp reversal near 92,260, reclaiming critical levels and challenging short-term bears.
Key levels and patterns:
New Low (NL): ~90,000 (set during the sharp sell-off).
Higher High (HH): ~96,370 (new local peak after reversal).
Higher Low (HL): ~92,000 (potentially confirming bullish momentum).
The current structure hints at a developing bullish breakout if the EMA at 94,000 holds.

1. Bullish and Bearish Scenarios 

Bullish Case (55% Probability):

Argument: The sharp reversal from 90,000 with a confirmed Higher Low (HL) suggests that bulls are regaining control. The reclaiming of the 94,000 EMA strengthens the bullish case.

Price Action to Watch:
A breakout above 96,370 could push BTC/USD to 98,000 or even 100,000.
Higher Lows (HLs) forming near 92,000-94,000 are critical for continuation.

Trade Setup: Enter above 94,000, target 96,000 and 98,000 with a stop below 92,000.

Bearish Case (45% Probability):

Argument: The rally could be a final flag pattern, trapping late bulls before another leg down. Failure to sustain above 94,000 increases the likelihood of a retest of the 90,000 zone.

Price Action to Watch:
A rejection at 96,370 or a breakdown below 92,000 would reassert bearish dominance.
A Lower High (LH) near 96,000 could signal the end of this rally.

Trade Setup: Short at 94,000 resistance or on a confirmed breakdown of 92,000. Targets: 90,000, then 88,000. Stop above 96,000.

Today's action offers an excellent example of a false breakout:
The initial push below 91,600 appeared decisive but quickly reversed at 90,000.
Lesson: Wait for confirmation before entering trades at breakout levels. Combine price action with key levels (e.g., EMA or support zones) to avoid getting trapped.

1. Performance Recap from Previous Analysis Using a $10,000 account with a $250 risk per trade:
Short from 91,600 to 90,000 (target achieved): +$416 (1.67R).
If re-entered long near 90,000 with a $250 risk and closed at 94,000: +$833 (3.33R). Total Profit: $1,249, increasing the account to $11,249.

1. Profit Potential from New Recommendations:

Bullish Play:
Risk: $250, Reward (to 98,000): ~$667 (2.67R).

Bearish Play:
Risk: $250, Reward (to 90,000): ~$416 (1.67R). Max Loss: $250 per trade.

What do you think about the sharp reversal from 90,000? Is this a true trend shift, or just another trap? Share your thoughts and favorite setups in the comments below!