Bitcoin: Break To 45K Or 35K?

Bitcoin has broken the 38K minor resistance and has tested the 40K whole number. The entire range between 38 and 40K is a resistance zone. Based on my thought framework, I place more emphasis on the probability of a short term bearish outcome from this level. This means risk for new longs is even HIGHER than it was at the 38K minor resistance. Based on this idea, I anticipate a retrace back to the 37 to 38K area (now a minor support) over the coming week (see chart illustration).

These situations are particularly hard for shorts. In a recent weekly update video I made, I pointed out that the price lingering around 38K could be interpreted as a sign of strength. I come to such a conclusion because price usually REJECTS resistance levels quickly, which it tried to do previously. This lures more shorts, particularly on smaller time frames, traders who do not have the perspective or experience to recognize the hidden strength.

This is precisely why in my previous article, I described a short day trade example, specifically mentioned to NOT expect much more than a move of 200 or so points. Counter trend setups are usually plentiful in these situations, but their potential is LOW.

While at the same time, price continues to flirt with a location that is not attractive for longs on the swing trade time frame. When risks are high on both sides of the market (bullish trend, but lingering at resistance) I have found it is most effective to either keep expectations very small on both sides (day trades only) OR just stay out completely until a higher probability scenario develops (test of support in bullish trend).

One more observation I want to point out is the weekly wave count (not illustrated here). If you go back to December of 2022, and begin the count there, the current wave appears to be a 5 of 3. If that's true, it points to the increased possibility of a Wave 4 corrective structure back to the 35K area support over the coming months. If a 5th wave appears after that, it implies a a test of the 45K area (this can take months). This is NOT to be meant as a forecast, but instead a point of reference to gauge risk.

Being in holiday mode, all of the markets are at risky levels. Take a look at S&P, bonds are also at a resistance level, etc. Don't get sucked into the hype that comes with this. Pay attention to LEVELS relative to their structure and constantly gauge and adjust RISK otherwise you will be fleeced. This game is NOT for your benefit that is why in my opinion the BEST DEFENSE wins.

Thank you for considering my analysis and perspective.