Bitcoin Spike on Daily

One of my primary technical analysis trading tools is that of False Breakouts or as I identify them; Spikes. I have found that when prices moves quickly in one direction only to return in the opposite direction within the same or following candle this indicates a potential reversal with a high probability. The corollary to this concept is that if price does then break that "spike" bar the trend can be confirmed.

The Spike
I have been watching the price action of Bitcoin exceptionally close over the last few weeks as the 2023 bullish trend approached and has stubbornly held a major Resistance. On the first US market open trading day of 2024 Bitcoin made a push to break the recent consolidation. However, the following day Bitcoin price reacted with a nearly -10% drop. Such a daily move is not uncommon in Bitcoin but where and when it happened is significant.

I operate under the logical thesis that if something is bullish... it should GO. There should be no such major rejections if the trend is strong. To have such a sudden rejection qualifies as a "Spike" and I created an indicator that identifies these for me to filter out the noise. That is exactly what happened at this point and place in Bitcoin price action.

This spike bolsters my conviction that the 2023 bull trend of Bitcoin has reached its zenith.

The Levels
If this spike proves to be a bearish reversal then the supports I identify based on past price inflation and 50% Retracements are:

• 35,400
  
• 30,700
  

If price surpasses the high of this week significantly the next level of Resistance is the March 2022 high of 48,200:

Expressing the Trade
Contrary to popular memes there exists already Bitcoin based ETFs. Rather than deal with the theta decay aspect of options the symbol BITI is the SHORT Bitcoin ETF. The price action is distorted but it also exhibited the Daily Spike price action. This instrument is the one I will use to express bearish trades on Bitcoin going forward.


I talk about my Spikes as a trading concept often during my Weekly Livestreams here on Tradingview. You may also follow my last few years of Bitcoin price action analysis in the links below to see how we got here. Trade wisely!