Bitcoin Analysis: 08–08–21
Second week of August
08–08–21
Current price: $44,710
Last week, we had a rejection/deviation from the daily range high which resulted in a pullback to the prior swing low which was around $38,000. This level held as support twice providing long setups by a swing failure pattern of the low. This retest became a higher low which enabled the move this week, breaking out of the daily range as well as the trend line from the all time high and the consequent lower high.
What can we expect for the price now? Currently, we are at the daily resistance at $45,000 which is also confluent with the weekly resistance at the same level. It is also confluent with the 0.50 retracement form the last lower high at $59,000. Also, the CME gap at $45,295 has been tapped as of this moment. This may indicate a strong resistance level at which we could potentially find short setups. However, on the lower time frames, price seems to be consolidating below the resistance level which could indicate that it would be a risky setup.
From this point, a potential scenario would be that we begin to break market structure on lower time frames and get a pullback to the trendline/the daily range and create a higher low once again at around $40,500 — $41,000. Then if that happens we must observe whether or not we will get reacceptance within the daily range or if we do make a higher low and create a base for another rally. The uptrend is strong at the moment so it would be more likely that we create a higher low or if the trend is stronger than expected, we might even continue to consolidate below this resistance level and push higher.
One thing to point out is that we also have a CME gap at $32,180 — $34,420. So now that the $45,290 gap has been tapped, a possibility would be that the price consolidates in the next few weeks in some sort of sideways range/pattern before filling the gap and creating a macro higher low for the bull run to continue. This would be an ideal scenario and a great opportunity for long-term positions.
Some setups that I am looking for now is a short setup here at $45,000 only if there is a sign of weakness by breaking structure on lower timeframes. The targets for that short setup would be at our prior daily high at $42,500 and then the daily range high at $40,600. However, if we do breakout from this point, I would expect the price to target the $47,000/$48,000 area. This could potentially be a nice long setup. If the price does pullback, I would also be looking for long setups around the daily range high and also the retest of the trendline.
Key levels:
Daily/weekly resistance — $45,000
Range high — $40,700
Last week’s high — $42,450
CME gap 1 — $45,295 — $48,365
CME gap 2 — $32,180 — $34,420
