After two weeks of stagnation, Bitcoin has finally begun to fall, but for now the decline can be described as fairly weak yet potentially significant. A correction has started, and it may take quite a long time. Recall that there is a non-negligible probability that the downtrend will end. However, the reasons for a new "bull" trend remain ambiguous and debatable. The last Bitcoin rise, which lasted three months, was essentially a move from the lower boundary of the daily flat channel to the upper boundary after a deviation formed at the channel's lower border and then at the upper border. The deviation at the upper boundary was deep, but if it is indeed a deviation, Bitcoin will head toward $70,800 in the near term. After that, the price will again trade within the flat, and its prospects will remain uncertain.
Next week the Federal Reserve will hold the penultimate meeting of the year, and the U.S. central bank's stance is already known. Even if the key rate is not raised (the base scenario), the Fed will still maintain a hawkish tone because U.S. inflation continues to rise above forecasts. Thus, the Fed's hawkish monetary-policy outlook is unlikely to support further gains in the leading cryptocurrency, which remains flat on the daily TF and in a downtrend on the weekly TF.
Also note that U.S. midterm congressional elections will be held on November 3. Republicans will most likely lose control of at least one chamber, with a 99% probability, making it even harder to pass the Clarity Act. Some Republicans oppose Trump's bill, believing it serves the president's personal enrichment. Also recall that historically Bitcoin tends to fall after U.S. midterm elections — a pattern observed for 12 years. Since a move is unlikely to begin immediately after the vote, the decline can already be expected. Moreover, the daily chart points to a downward direction.
On the daily TF, the downward trend structure is broken, so most likely "digital gold" has officially moved into forming a new bullish trend. The price worked off the bearish FVG from the previous trend, reacted to that pattern, and a correction began as expected. A move beyond the $ 60,000–$82,500 sideways channel may still be a deviation that, together with the reaction to the bearish FVG, could trigger a drop to the channel's lower boundary. Thus, traders had and have every reason to open short positions—moreover, another sell signal formed within the last bearish FVG.
On the 4-hour TF, a downward structure has begun to form. The CHOCH line is currently at the 87,000$ level. On the daily TF, all necessary downside reversal signals have been received, allowing traders to open short positions. Bitcoin's targets are best determined by the daily sideways channel, which we still view as relevant. On the 4-hour TF, the last bearish FVG produced a price reaction, then a flat formed, and overnight an upper-boundary deviation of the sideways channel was formed, which we warned about in advance. Thus, in the near term, Bitcoin may crash to the 80,400$ level. Since the flat is not eternal, breaking the lower boundary of the flat is quite possible.
Bitcoin shows signs of the start of a new bullish trend. As is typical, this trend begins with a pump with no clear, specific reason. The Fed has not started cutting rates, and the Clarity Act bill was not passed. In the near term, on the daily TF, Bitcoin may decline because the price reacted to the bearish FVG and formed two sell signals. Also note that a move outside the daily sideways channel may be a deviation — yes, a deep deviation, but still a deviation. If so, Bitcoin could head toward 70,800$ and even maintain the downtrend that began last year. We believe short positions are the most relevant in the near term. Two sell signals with deviation formed on the daily TF, and a deviation formed on the 4-hour TF. Bitcoin's prospects remain bearish. Nearest targets — 80,400$ and 70,800$.
CHOCH — Change of Character: a break in trend structure.
Liquidity — Liquidity: stop-losses and pending orders that market-makers use to accumulate positions.
FVG — Fair-Value Gap: a price-inefficiency zone. Price moves quickly through such areas, indicating one side is absent from the market. Subsequently, price often returns and reacts to these areas, continuing the main trend.
IFVG — Inverted Fair-Value Gap: after returning to such a zone, price does not react there but impulsively breaks through it and then tests it from the other side.
OB — Order Block: a candle where a market-maker opened a position with the intent to take liquidity and then establish a position in the opposite direction.
*La presente analisi del mercato ha un carattere esclusivamente informativo e non rappresenta una guida per l`effettuazione di una transazione.
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