The Bitcoin hit the all-time high, immediately correcting as it did so. There was a flash crash which, in the dollar pair, led to a retracement of ~14%. However, the price found strong support at an daily imbalance with confluence at the 0.5 retracement level, and ended the day closing with a "mere" drop of ~6.66%. This was on the daily time frame.
The price behavior in the following days showed strong bullish sentiment, with the price hitting the all-time high again 3 days later.
So ended last week, the week where we hit the all-time high of 2021. As we can see, the week closes below the ATH level.
There are still two days left to close the weekly BTC candle; however, despite starting strong, Bitcoin falls towards the end of the week, creating a clear upper wick indicating price rejection and leaving the price below the level of the last ATH.
Ending the week like this isn't necessarily bad. If it ends this way, we may favor a next week retracing to the first weekly bullish array.
The way the price will react in this FVG will dictate the probability of the next events. There are at least two favorable scenarios:
1. Bitcoin reacts strongly in this FVG and ends the week with a green candle closing above the open/close of this week's candle.
2. Bitcoin reacts weakly in this FVG and ends this week with a swing high, demonstrating a willingness to continue retracing and seek more liquidity below.
The lower limit of the daily imbalance is around ~53090, which would signify a drop of approximately ~30% from the all-time high if the price were to reach that level.
However, it's important to consider that there are two weeks left to finish the monthly candle. If the next two weeks see retracements to the imbalances below the price and if the price fails to show strength upwards, the monthly candle will end below the all-time high line. This could signify a swing failure pattern.
A swing failure pattern is a rejection that is characterized by a candle that clears liquidity above a previous significant swing high or low. By clearing liquidity above that high, the price seeks to distribute it, retracting. When that candle closes and the price closes below the previous liquidity level (which, in the case of Bitcoin, is more relevant because it's the previous all-time high), we say that the price has formed a swing failure pattern, and in that case, we expect the price to reverse the trend.
The price behavior in the following days showed strong bullish sentiment, with the price hitting the all-time high again 3 days later.
So ended last week, the week where we hit the all-time high of 2021. As we can see, the week closes below the ATH level.
There are still two days left to close the weekly BTC candle; however, despite starting strong, Bitcoin falls towards the end of the week, creating a clear upper wick indicating price rejection and leaving the price below the level of the last ATH.
Ending the week like this isn't necessarily bad. If it ends this way, we may favor a next week retracing to the first weekly bullish array.
The way the price will react in this FVG will dictate the probability of the next events. There are at least two favorable scenarios:
1. Bitcoin reacts strongly in this FVG and ends the week with a green candle closing above the open/close of this week's candle.
2. Bitcoin reacts weakly in this FVG and ends this week with a swing high, demonstrating a willingness to continue retracing and seek more liquidity below.
The lower limit of the daily imbalance is around ~53090, which would signify a drop of approximately ~30% from the all-time high if the price were to reach that level.
However, it's important to consider that there are two weeks left to finish the monthly candle. If the next two weeks see retracements to the imbalances below the price and if the price fails to show strength upwards, the monthly candle will end below the all-time high line. This could signify a swing failure pattern.
A swing failure pattern is a rejection that is characterized by a candle that clears liquidity above a previous significant swing high or low. By clearing liquidity above that high, the price seeks to distribute it, retracting. When that candle closes and the price closes below the previous liquidity level (which, in the case of Bitcoin, is more relevant because it's the previous all-time high), we say that the price has formed a swing failure pattern, and in that case, we expect the price to reverse the trend.