Bitcoin displayed decent growth at the beginning of the new week and has exited the sideways channel it had been in for at least a month. The "bearish" order block has been negated, but not permanently. Since this pattern was impulsively overcome, it now serves as a breaker block and can be a source of buy signals if the price reacts to it from above. It is important to note that any pattern holds no significance without a reaction to it, and there is no confirmation of that reaction on time frames lower by two degrees. Therefore, the order block did not provide traders with any grounds for selling—the price simply did not react to it. However, the reaction to the breaker block might follow today.

We cannot say that Bitcoin's exit from the sideways channel through the upper bound was unexpected for us, as there are at least three areas for correction and three points of interest (POI) on the daily time frame. Additionally, there is now a liquidity pool on the daily time frame that interests bears. Below this pool (trend line), there are pending sell orders and stop losses for buyers. Thus, we have a clear target for correction (the nearest "bearish" fair value gap) and an obvious target for a new decline—the liquidity pool.

Overall, Bitcoin continues to rise very slowly and weakly, as visible on any time frame. We are not saying that an upward trend is currently impossible; however, any growth until a trend reversal is classified as a correction. Whether to act on the correction is up to the traders themselves.

This evening, the Fed meeting will take place, where the key rate is unlikely to change. For Bitcoin, this is bad news, as a tighter monetary policy offers higher returns on safe assets. Nevertheless, Bitcoin has not been bothered by this fact in recent days and, on the contrary, is rising. This once again demonstrates that the market is ignoring the fundamental background.

General Picture of BTC/USD on the 1D

On the daily time frame, Bitcoin continues to form a downward trend. The trend structure is downward, and the change of character (CHOCH) line currently sits at $97,900. Only above this level can it be considered that the downward trend has ended. The last sell signal was generated within the bearish fair value gap (FVG) at $96,900-$98,000. Thus, traders had a great opportunity to capture almost all of the recent downward movement. The current target for the decline remains the level of $57,500—61.8% on the Fibonacci retracement. Given no signs of a trend reversal to the upside, we believe the decline will continue. On the daily time frame, the nearest area of POI for new sell trades is in the range of $79,500 – $81,100.

General Picture of BTC/USD on the 4H.

On the 4-hour time frame, the price has completed a 5-week flat pattern. The CHOCH line is at $90,560; only above that level can we speak of a transformation into an upward trend. Another CHOCH line provides support for the upward correction and lies at $65,500. Crossing this line indicates the completion of the correction. Since the order block was impulsively broken, it is now a breaker block. A price reaction to it from above may provide the basis for small short-term buy positions, with the target being the nearest FVG on the daily time frame.

Trading Recommendations for BTC/USD:

Bitcoin continues to form a full-fledged downward trend. We continue to expect a decline targeting $57,500 (the level of 61.8% on the Fibonacci retracement from the three-year upward trend), and currently, there are no signs of a trend reversal. Even the $57,500 level no longer looks like a final stop. Among the POI areas, the only notable one is the nearest "bearish" FVG on the daily time frame, which is quite far from the current price. On the 4-hour time frame, the breaker block may serve as a basis for opening long positions with a target of $79,300, but it should be noted that any rise in the cryptocurrency at this time is a correction.

Explanations for Illustrations:

• CHOCH – change of character in the trend structure.
• Liquidity – Stop Losses of traders that market makers use to accumulate their positions.
• FVG – Fair Value Gap. Price moves rapidly through such areas, indicating a complete lack of one side in the market. Subsequently, the price tends to return and react from such areas.
• IFVG – Inverted Fair Value Gap. After a return to such an area, the price does not react to it, instead impulsively breaks through it and subsequently tests it from the other side.
• OB – Order Block. The candle on which the market maker opened a position to obtain liquidity for forming their own position in the opposite direction.