Bitcoin 4th Bull Leg Hits Resistances on Monthly Chart

Hey everyone, welcome to this week's

video analysis of Bitcoin's price action

on the monthly, weekly, and daily

charts. My name is Joseph Capo, price

action trader and author for the Brooks

Trading Course. Let's dive into the

charts and unpack what's happening.

Starting with the monthly time frame and

then zooming into the weekly and daily

charts for finer details. The monthly

chart remains in a solid bull trend.

That said, as I've been signaling for a

while, this bull trend is now slamming

into critical resistances. First,

there's a measured move up calculated

directly from the 2022 draw down.

Second, and zoom out with me here, look

at the screenshot in the bottom right of

your screen. The price is pressing right

against the top of a wedge formation.

Let's count the legs properly from the

2023 bull reversal. one bull leg, two

bull legs, three bull legs, and this

current push is the fourth leg. Hitting

both the wedge top and the measured move

target during a fourth bull leg

significantly increases the odds that

the market cycle changes its behavior

soon. After a strong bull channel like

we've had, the most probable transition

is into a trading range. Personally, I

already believe we're inside that

trading range. But even if a strong bull

breakout erupts from here, I would

interpret it as simply another bull leg

within what will ultimately become a

broader trading range. Trading ranges

close gaps and that means even on a

breakout, the price will very likely

come back to test the current higher

high. If the market has indeed already

hit the top of this potential trading

range, then the low of the range should

form around this area. This zone trapped

bears who sold the close or sold below

that strong bear bar. And there's also a

clear gap between this higher high and

this higher low, creating extremely

strong support. The moving average

you're seeing is the 365day

moving average. In a trading range

scenario, I expect the market to

gravitate toward this level. If price

surges far above it, pullbacks to the

average become likely. If it drops, test

higher into it makes sense. Looking

ahead to the coming months, I think

we're more likely to end the year above

current prices. Bears simply aren't

strong enough yet to take control.

However, this is not a strong bet. Most

traders, including myself, want to see

what actually happens as price nears the

$100,000 level before committing hard.

That could flip my view quickly. Right

now, we have a tight trading range with

weak bulls, weak bears, and relatively

limited downside risk because of strong

support. Shifting to the weekly chart.

This week triggered a high one setup,

but zoom in on the context. It's inside

a tight trading range, which makes it an

unreliable buy signal bar. In fact, it

may have trapped bulls into their long

positions. The price did trade below the

prior week's low, but that wasn't a

great sell signal bar either, so we

weren't expecting much downside

follow-through this week. We're sitting

right around the lower boundary of a

trading range and there are some

powerful magnets below that we might

visit. These include a confluence of the

$365day

moving average, the $100,000 big round

number and the major higher low. Those

levels are absolutely critical traders

everywhere will be watching intently and

the price action around them will

determine the next swing direction. At

current prices, it's extremely difficult

to make money. The market is too

balanced, too neutral. best to avoid

trading this kind of environment

altogether. If the supports I mentioned

break quickly, then price has a chance

to drop toward the green area below,

which is the zone where we signaled

trapped bulls on the monthly chart. That

said, since we're at the lower boundary

of this tight trading range, I believe

we'll close above current prices in the

next few weeks. Finally, the daily

chart. In the prior report, we were

positioned right here. And I highlighted

that the strongest magnet on the entire

chart was above at the $115,000

price level. Last Sunday, the price

reached exactly that level. Not only did

it arrive, but it broke above a triangle

and triggered a theoretical bull signal.

I explicitly said I would prefer to sell

a failed bull breakout rather than buy

into it. Monday delivered no good

follow-through for the bulls. In fact,

it formed a sell signal bar. The market

was creating a double top with the

October 13 high. Following a fivebull

micro channel, some sideways to

uptrading was expected, which it did,

but Tuesday delivered a bare reversal,

and that was a much better sell signal

because the loss of momentum became far

more evident. The bear's goal now is a

swing down toward the $15,000

level. Wednesday brought a strong bare

breakout. Thursday pushed to new lows

and even closed below Wednesday's low

which created this micro gap open.

Friday formed an inside bar, not a

really strong bullbar by any means.

Question, are there sellers lurking

above the bull inside bar or above the

bare micro gap? Look where we are again.

Smack in the middle of a triangle. We're

also at a lower boundary of the price

range visible on this time frame. If

this area favors anyone even slightly,

it's the bulls. But I wouldn't be buying

here either. When we trade inside

ranges, we should only contemplate

positions when price is near the

boundaries, looking for reversals or

breakouts at the extremes. We should

never bet on direction when we're in the

middle of a trading range or inside a

breakout mode pattern like this. As

we've seen across all three time frames

in this analysis, everything remains

very unclear. When things are this

confused, traders have one powerful

weapon, patience. We need more

information. We need to wait for the

price to move to other areas or form a

credible breakout before taking action.

In my view, this is just classic trading

range price action. Would I place a buy

limit order below Thursday's low or

below October's low? There are strong

magnets below as discussed on the weekly

time frame. But as we covered on the

monthly, we're at risk of falling far

below those magnets. So again, caution

is key. In the following weeks, we will

see much clearer action. If I absolutely

have to bet on one direction, I believe

the price will revisit the $115,000

level soon and trade even higher. But I

won't be surprised at all if the price

falls down to the $100,000 level. So, I

do not want to deliver a strong opinion

on bias yet. Before we conclude, I'd

like to invite you to explore our newest

initiative, daily end of day Bitcoin

reports. We are publishing three end of

day reports detailing intraday price

movements each week. You can find them

in the Brooks Trading Course blog. If

you're looking for more Bitcoin related

price action material and you have more

suggestions, please take your time to

comment. Your support is vital. Please

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comment section of the blogs themselves.

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