Bitcoin $BTC is currently at a major crossroad. After failing to hold its higher momentum, the price has dropped and is now testing some crucial areas. If you watch the market daily, the big question right now is: "will this correction push deeper, or will it hold the bottom line?"
Let's break down the price action directly. Looking at the 4 hour chart, bitcoin has retraced from its recent swing high around $66,915 and is now consolidating near a major support area around $62,450, which lines up with the 100% Fibonacci level.
From a short term trend perspective, the price is already trading below the 50 period simple moving average (SMA). This is an early warning sign that buying pressure is fading. On top of that, the price already broke below the 78.60% Fibonacci level at $63,406. If this 4 hour candlestick successfully breaks down below the 100% support level ($62,450), the door opens wide for a deeper drop toward the sub $62,000 region.
If we zoom out and look at the bigger picture using a downward sloping channel, BTC's movement consistently forms lower highs and lower lows. Yesterday's price rejection happened right when it touched the upper resistance line of that channel.
The spike in selling volume following the drop right in the middle of the channel confirms that sellers are fully in control. The stochastic indicator is also pointing downwards after leaving the overbought zone, giving us extra confirmation that the bearish momentum is still strong.
Now, based on this technical structure, there is a pretty neat short (sell) position setup with a clear risk management plan that’s worth noting.
We can enter a short position right around the $64,110 zone. To stay safe from fakeouts, put your stop loss (SL) around $65,525 (risking about 2.11% or 1,356 points). Meanwhile, for the take profit (TP) target, we can aim around $60,208 with a potential profit of around 6.08% (3,907 points). From this math, we get a solid risk to reward ratio of 2.88.
As a final note, all of the analysis and short opportunities above are strictly built based on price structure, indicators, and pure technicals visible in the market right now. This analysis does not factor in macroeconomic or microeconomic shifts that can change anytime. So, if a major macro sentiment or big news drops later on like from the Fed or important economic data releases that sparks new momentum, this technical view could either shift or hold steady. As an analyst, my role is simply to map out what's happening on the chart according to current market data, so readers understand that crypto dynamics are heavily driven by outside variables.
⛔Disclaimer - This analysis is for educational purposes and reflects personal opinion only, not financial advice. Always practice risk management and use stop losses (SL) according to your own risk tolerance.
Keep trading and stay profitable📊
