Pattern theory analysis
Top reversal pattern: From January 3 to January 8, the price of Bitcoin quickly surged to about $102,724.38, forming a top but failed to break further, subsequently falling and forming a similar 'double top' pattern. This pattern signals a top reversal, indicating exhaustion of bullish momentum.
Downward channel:
Price rhythm: Since January 8, the price has entered a rapid downward mode, forming consecutive large bearish candles, indicating extremely strong bearish momentum.
Slope observation: The current trend shows a clear downward channel inclination, indicating bearish sentiment in the market and strong selling pressure.
Lower support: The lower support of the current downward channel is about $91,500.
Bull defense zone:
Short-term support: The current price has touched around $95,000 multiple times, showing strong short-term support in this area, and the market bulls are attempting to fight back.
Long-term support: If $95,000 is lost, the price may further test the important support area of $91,500 from the end of last year.
Support & resistance analysis
Key support level:
92,500 (current support): An important defensive level for the short term. If this level is lost, the market may further decline.
91,500 (strong support): An important support area from the end of last year that may attract more buying interest.
Key resistance level:
96,158 (neckline position): The current important resistance area for rebounds. If the rebound cannot stabilize here, the trend remains bearish.
100,000 (psychological barrier): An important dividing line for bullish and bearish sentiment. A breakout indicates short covering and bullish dominance.
Technical indicator analysis
Trading volume:
Trading volume characteristics: From the volume distribution in the chart, the current price is close to the main trading concentration area ($94,500 to $96,000), showing that this range is the core area for market speculation.
Volume-price divergence: The downward process has not been accompanied by significant volume increase, indicating that although selling pressure is strong, panic selling is limited.
MACD: Both DIF and DEA are below the zero axis, and the MACD histogram is positive, indicating weakened bearish power but still in a weak state.
RSI: RSI14 value 38.3, close to the oversold range, there may be a rebound demand in the short term.
EMA: The current price is below EMA7, EMA30, and EMA120, indicating an overall bearish trend. EMA7 ($94,876) and EMA30 ($95,763) form resistance levels.
Bollinger Bands analysis
Current status
Bollinger Bands contraction and expansion:
Recent expansion: The Bollinger Bands experienced a significant expansion in early January, indicating large fluctuations in the market in the short term, with prices quickly breaking upwards before sharply retreating.
Current contraction: The upper and lower bands of the Bollinger Bands are gradually contracting, reflecting a decrease in market volatility, and the market may enter a brief oscillation phase.
Price position in the Bollinger Bands:
The price is currently close to the middle track of the Bollinger Bands (about $95,000), indicating that the market is trying to restore a balance after a sharp decline.
Downward test: During January 8 to 9, the price briefly fell below the lower track but quickly rebounded inside the band, indicating effective support near the lower track.
Key observation points
Bollinger Bands upper track ($96,172):
If the price can break above the upper track and stabilize, it may indicate that the market is entering a new round of upward trend.
However, if it rebounds and meets resistance near the upper track, it may form oscillation or continue to decline.
Bollinger Bands lower track ($93,791):
During the previous decline, support near the lower track showed strong performance.
If the price breaks below the lower track again, it may trigger larger-scale selling pressure.
Bollinger Bands middle track ($94,981):
The current price is oscillating near the middle track, indicating that the market is in a short-term equilibrium state.
If the price can stabilize above the middle track, bulls are expected to attempt further breakthroughs; conversely, it may again test the lower track support.
Bitcoin's current Bollinger Bands indicate a state of gradually converging volatility, suggesting that the market may be gearing up for the next breakout. In the short term, oscillation near the middle track ($95,044) may be the main theme, while the upper track ($96,191) and lower track ($93,897) will become key resistance and support.
Chip distribution analysis
Chip concentration area (main chip position)
The current main chip concentration area is between $95,000 and $97,000, indicating this is a region with high recent trading volume and also the main support and pressure zone for price: Support logic: Holding chips have accumulated significantly in this range, reflecting a high market acceptance of this price, and major funds may be building positions here. Below this position, if the price retraces, major funds may choose to defend the market, providing strong support. Some funds may opt to take profits, and if the price rises to this area, it may encounter selling pressure.
Chip sparse area
In the $97,000 ~ $102,000 range, chip density has significantly decreased, indicating that this area is a rapid decline zone triggered by short-term selling. Chips are sparse here, and if the price breaks above $97,000, due to limited selling pressure in this area, the price may enter a 'chip vacuum zone', triggering a rapid surge, with target levels possibly looking towards above $102,000. Breakthroughs in chip sparse areas are usually accompanied by increased trading volume and enhanced bullish sentiment.
Dynamic changes in the chip concentration area
Currently, a large concentration of chips is present in the $95,000~$97,000 area, reflecting signs of control by major funds. If the price retraces below $95,000 in the future, attention should be paid to: whether the open interest decreases significantly (loose chips), if it decreases, it may indicate fund withdrawals, leading to further price declines. If open interest remains stable, it indicates that major funds are still defending the market, providing strong support.
Large transaction analysis
Current market sentiment
Green (buying power): A large number of green circles are concentrated around $95,000, indicating significant buying support in this price area, mainly represented by active involvement from institutions or large players. This also explains the temporary stabilization of the price when it retraced to this point.
Red (selling power): Dense red circles appear above the $102,000 area, indicating this is a strong selling pressure zone recently. Combined with chip distribution, it may be due to major funds taking profits at high levels or some institutions adjusting their positions.
Trading behavior and market structure
Phase characteristics: High-level cashing out: When the price approaches $102,000, selling pressure is significant (large red transactions), subsequently leading to a weakening of market sentiment and triggering a pullback.
Bottom absorption: When the price drops to around $95,000, significant buying power (green circles) appears, indicating funds have an intention to buy low.
Current transaction logic: The price drops to around $95,000, and the market gradually enters a speculative phase, with short selling power temporarily weakened, but bullish strength not fully dominant.
Market logic and background
The uncertainty of the Federal Reserve's monetary policy and the weak global economic environment have led to increased market risk aversion, suppressing risk assets (such as Bitcoin).
The rise in the yield of 10-year U.S. Treasury bonds has led to a flow of funds towards 'safe assets', further putting pressure on Bitcoin.
The fear and greed index has been at a low level recently, indicating insufficient market confidence, and short-term funds are more inclined to wait and see or short.
Trend prediction: Intraday and long-term outlook
Intraday trend prediction
Baseline forecast: Range oscillation, mainly weak rebounds
Volatility range: Prices are expected to oscillate between $95,000 and $98,000. Bulls may attempt to push prices up, but face significant resistance.
Rebound space: There may be some rebound momentum in the short term due to the RSI being in an oversold state, but the resistance at $98,000 is difficult to break, limiting the rebound extent.
Secondary prediction: Break down and test lower support
Downward risk: If the price loses $95,000, it may quickly test the $91,500 support area or even lower.
Market sentiment: The current market leans towards risk aversion, and if accompanied by negative macro data (such as non-farm payrolls, CPI, etc.), the decline may further intensify.
Long-term trend prediction
Baseline scenario: Break down and test lower support
Technical pattern: If the price effectively breaks below $95,000, it may confirm a head and shoulders pattern, further testing support at $91,500 or $85,000.
Momentum amplification: A breakout may trigger panic selling, forming a new downward trend, leading the market into a deeper adjustment.
Optimistic scenario: Breakout after box oscillation
Oscillation range: If the $95,000 support is effective, the price may form a box oscillation in the $91,500 to $98,000 range.
Target: If enough momentum accumulates and breaks above the box top, the price is expected to hit $105,000 to $108,000. However, breakthroughs require support from the macro environment and inflow of funds.
Pessimistic scenario: Continued bearish dominance
Downward risk: If market sentiment continues to deteriorate, the price may fall below the box bottom, entering a deeper bear market cycle, with targets possibly shifting down to $80,000 or even lower.
Trading strategy
Short-term trading strategy
Bullish strategy
Opening range: $94,500 ~ $95,500, suitable for speculative low buys and rebounds.
Stop loss range: Below $94,000 (loose chips, evident short advantage).
Target: $97,000 ~ $102,000, gradually taking profits.
Bearish strategy
Opening range: If the price is blocked near $97,000, consider shorting at high levels, with the opening range set at $97,000 ~ $98,000.
Stop loss range: Above $98,500 (chip breakout confirmation).
Target: Below $95,000.
Oscillation trading strategy
Range trading: Use the upper and lower tracks of the Bollinger Bands ($93,800 ~ $96,200) for high selling and low buying, with stop losses set outside the tracks.
Target: Gradually reduce positions or take profits within the $95,000 ~ $96,000 range.
Medium to long-term layout strategy
Medium to long-term investor strategy
Positioning on dips: If the price approaches the $91,500 area, consider building positions in batches, waiting for the medium to long-term trend to recover.
Chip accumulation: If the $95,000 ~ $97,000 range continues to see chip accumulation, it indicates that funds are accumulating at the bottom, and positions can be gradually built with a target towards above $110,000.
Risk control suggestions
Focus on market data: Pay close attention to macro data (such as non-farm payrolls, inflation, Federal Reserve meeting minutes) and important market news to judge the market volatility direction.
Stop loss management: Strictly set stop losses for short-term trading (e.g., below $94,500 or above $98,500) to guard against sudden market risks.
Breakout direction confirmation: Closely monitor the breakout direction of the Bollinger Bands middle line, and combine it with changes in trading volume to prevent losses from false breakouts.
Disclaimer: The above content is for reference only and does not constitute investment advice.
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