Bitcoin (BTC) - Pre-FOMC Market Update
As we approach the FOMC meeting, it is crucial to deleverage as much as possible, given the uncertainty surrounding market reactions. Market participants are already anticipating a 50 basis point cut, which has driven traditional finance (TradFi) to new highs and pushed Bitcoin back into a safer zone, or just below the pivotal area. I won’t become optimistic until later in the week if the market confirms a return to a trending phase.
As previously mentioned, we’ve maintained a bullish bias as long as prices remained above $53.5K. I haven’t been inclined to short the market unless that level is breached. However, there have been opportunities on both sides of the trade. In fact, this has been a fantastic trading range, offering ample chances to trade both long and short setups, particularly around weekly and monthly open levels. For now, this range seems to favor long positions, and we are at a critical point of consolidation where momentum could build. Pay close attention to tomorrow’s price action and the outcome of the weekly close.
Long Side
Historically, daily candles following the US labor market report often set the market’s direction. On September 6th, contrary to previous price movements, we observed a bearish expansion bar that failed to sustain its momentum over the next three bars and was subsequently invalidated. From a price action perspective, this is considered relatively bullish.
Following today’s movement, we’ve observed two significant breakouts (BMs) and a change of character in both the daily and 12-hour timeframes. While it’s important to remain cautious since these timeframes have been invalidated multiple times within this range, the developments are still promising.
The weekly timeframe remains crucial, as there has been no particular bullish signal apart from holding the monthly higher low at $53K. If we expect higher prices, focusing on a trend reversal on the timeframe that has consistently indicated lower prices is prudent.
Spotting this early wasn’t part of the initial strategy. We’ve already provided three entry points: $53K, $56K, and $57K, in that order, for those prioritizing exposure and anticipating upward movement. Currently, the focus should be on capitalizing on a swing move, which will only be viable if the price starts trading above $65K. This level needs to be surpassed to demonstrate who truly holds control.
In Conclusion:
Our outlook for Bitcoin remains positive, but nothing is confirmed until the weekly timeframe shows a reversal of the downtrend and validates a significant five-week move from these lows. Tomorrow is crucial; if you’re on the sidelines, remain there to avoid being whipsawed by market reactions.
