In the aftermath of Bitcoin’s unexpected Tuesday downturn, Crypto Analyst HeycH provided insights in the Wednesday Open Analysis. Contrary to projections, Bitcoin experienced a dip surpassing initial expectations, breaching the lower 4H SSL (sell-side liquidity).
However, a silver lining emerged as the cryptocurrency found support at the +OB (bullish order block) and closed above the CE (consequent encroachment, 50% mark) of the +BB (bullish breaker block).
With eyes on the Draw on Liquidity (DOL), HeycH anticipates a drawdown of around 50% of the lower wick or the Previous Day Low (PDL) using the next-day model.
The market currently stands at a mid-range position, discouraging order placement due to its unpredictable nature. This situation is further compounded by being sandwiched between two PD arrays, rendering it a low-probability environment for trading.
In such uncertain conditions, HeycH advises traders to observe the price action (PA) as it develops and react accordingly. The initial direction the market takes will be crucial in gauging expectations for the rest of the day.
If the market heads towards the 50% or the wick of PDL initially, an upside reversal could be on the horizon. However, if prices move towards the sell-side imbalance buy-side inefficiency (SIBI), a potential downside shift might be in store.
HeycH emphasizes the importance of not setting precise limits but instead observing reactions as prices reach key levels. Additionally, he notes that prices typically don’t leave after tapping a point of interest (POI) without retracing, providing an opportune moment to enter a position on a lower time frame (LTF).
While acknowledging the deviation from earlier projections, HeycH leans towards a favorable upside reversal. Supporting this stance are several factors, including the previously taken 4H SSL, the absence of a Market Structure Shift (MSS) in the 4H timeframe despite observed CISD (change in the state of delivery) and downward displacement, and the anticipated support at the 4H 200 EMA post-PDL.
Furthermore, the fact that Bitcoin tapped the Value Area Low (VAL) suggests a potential move back up towards the Point of Control (POC) and Value Area High (VAH).
As the day progresses, the crypto community awaits further market developments, underscoring the importance of adaptability and informed decision-making in navigating the dynamic landscape of cryptocurrency trading.
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