Bitcoin has ended a local flat and broken out into wider territory. However, confidence remains low that the leading cryptocurrency will continue to rise. Two facts are particularly troubling. First, Bitcoin has reached a bearish imbalance on the daily timeframe and so far cannot overcome it. That may be a coincidence or a pause, but the pattern clearly creates resistance for price. Second, Bitcoin may still be inside a daily-timeframe sideways channel (it is shown on the chart). Yes, price has closed above the channel, but breakouts can be deviations as well. We dislike such ambiguous deviations when it is unclear whether this is a true breakout or merely a deep deviation; the market does not care whether participants like it or not. A close above the flat can still be a deviation.

The new week began with another, this time muted, Bitcoin uptick in response to events in the Middle East. Overnight Yemen's President Rashad al-Alimi announced the start of a military operation against the Houthis, who control a large part of the country, including Sanaa. Al-Alimi said the operation aims to restore control over Yemen's entire territory. Bitcoin barely reacted to this event and is now in another pause.

Meanwhile, Galaxy Digital CEO Mike Novogratz said Bitcoin could approach $100,000 by year-end. He suggested the market bottomed near $60,000 and that $80,000 is the key level now. If bulls can hold their gains, Bitcoin could continue rising through the remaining three months of the year. Novogratz also said Bitcoin remains the special crypto that sets the tone for the whole market and that selling pressure is easing. However, he also noted that further Bitcoin gains would require passage of the Clarity Act (unlikely before US Congressional elections) and Federal Reserve policy easing (also unlikely soon). In that sense, his view is internally inconsistent: he expects a rally but admits several material preconditions are missing, which would make sustained growth difficult.

General Picture of BTC/USD on 1D

On the daily timeframe, the bearish trend structure is broken, so "digital gold" has most likely moved into forming a new bull trend. At the moment, price has filled the prior trend's bearish FVG, so we expect a downward correction. The breakout from the $60,000–$82,500 sideways channel may still be a deviation, and a reaction to the bearish FVG could trigger a decline. A bullish FVG currently supports price in the $81,500–$89,000 range, but the reaction to that pattern has been weak. Bitcoin is increasingly approaching a correction.

General Picture of BTC/USD on 4H

On the 4-hour timeframe, Bitcoin left the bounds of the sideways channel. Within that channel, four deviations formed, the last two being bullish. Thus, traders could have worked the final move from the channel's lower boundary to its upper boundary, and now it can be said the flat is over. We would also note the last four price highs, which form a liquidity pool. Before a new drop, price may take liquidity from this pool. There are no clearly actionable patterns right now, and the most recent bearish FVG was ignored.

Trading Recommendations for BTC/USD

Bitcoin shows all the signs of the start of a new bull trend. This trend begins, as usual, with a pump that lacks concrete, clear reasons. The Fed has not begun cutting rates, and the Clarity Act has not been passed. In the near term, on the daily timeframe, Bitcoin may decline, since bulls face resistance from a bearish FVG. Also note the current breakout from the daily sideways channel may be a deviation — yes, a deep deviation, but still a deviation. If so, Bitcoin could head toward $70,800. We believe short positions will be more relevant in the near term.

Explanations for the illustrations:

• CHOCH – change of character (trend structure break).
• Liquidity – liquidity, Stop Losses, pending orders that market makers use to accumulate their positions.
• FVG – fair value gap (area of price inefficiency). Price moves through such areas very quickly, indicating the absence of one side in the market. Subsequently, price tends to return and receive a reaction from such areas in continuation of the main trend.
• IFVG – inverted fair value gap. After returning to such an area, price does not react but impulsively breaks through, then tests it from the other side.
• OB – order block. The candle on which a market maker opened a position with the aim of taking liquidity to form their own position in the opposite direction.