Market Open and Initial Price Action
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The Bitcoin market opened on October 28th near the previous day’s close, resulting in a small gap. Small gaps often lead to either a trend day or a trading range day.
The first two bars were dojis, indicating indecision and suggesting a likely trading range rather than a strong trend. The gap between the prior close and today’s open acted like a magnet, closing by bar two.
Price started rising after bar six, but the upward movement lacked strength as most bars were weak or indecisive except for two strong bars.
Bar nine was a strong bull signal, closing above the previous day’s high, but it formed near the top of a weak bull channel (wedge top), signalling potential for an opening reversal.
Opening Reversal Setup and Bearish Signals
Bar ten showed good follow-through with buying, making it difficult to sell at bar 11. Bar 13 was a strong bear signal bar, closing below the previous day’s high, signaling failure of the bull breakout and confirming an opening reversal.
Bar 14 provided further bearish follow-through, making bars 13 and 14 good sell points aiming for a downward swing equal in size to the earlier bull leg. Traders made money and here’s another way to make money from the bitcoin, affiliate marketing.
Bar 15 was a bear exhaustion bar, often signaling profit-taking and a potential pause or reversal. Bar 16 was a huge bull reversal bar, creating an outside bar on the daily chart and indicating a big swing early in the session. The market’s early large swings suggested the day would not be a trending day but rather one with reversals and range-bound action.
Mid-Day Price Action and Trapped Traders Following bar 16, bulls who were active around bar 9 likely scaled in again, establishing a break-even resistance zone at the 50% retracement between entries. From bars 19 to 20, the market was probably “always in long” but those bulls eventually became trapped as bear bars appeared at bars 22 and 23.
By bar 25, four consecutive bear bars confirmed the trapped bulls. Bar 27 was a strong bear bar but potentially exhausting as it retested the prior day’s low, with bar 28 confirming exhaustion signals.
Buying above bar 28 was risky due to the extended bearish momentum, but a small double bottom formed near bar 31, offering a tentative buy opportunity. Bar 36 signaled a possible return to a bullish bias, with bars 37 to 39 showing small reversal activity, though bulls remained weak overall.
Formation of Wedge Top and Bear Breakout: The market formed a wedge top with highs at bars 37, 41, and 45, characterized by tight price action and weak momentum, showing indecision.
A strong bear breakout occurred at bars 53, 54, and 55, confirmed by a decisive move below the exponential moving average (EMA). The EMA acted as resistance, and bears gained strength with a low-to-strong sell signal around bar 58 and good follow-through at bar 59, indicating the potential for a downward swing.
Bears might consider exiting near wedge bottom lows at bars 54, 60, and 62, especially if a bull reversal forms (as at bar 64). Bulls attempted to rally up to the EMA but failed, and bears received another low-to-sell signal. Bar 70 was a difficult bar to sell due to the increased risk and limited remaining time in the session.
Summary and Trading Implications The day featured strong sell signals that proved effective for swing trades, particularly at bars 13 or 14 and bars 58 or 59.
The market did not sustain strong trends but oscillated between swings and reversals, favoring traders who recognized failed breakouts and trap setups. The analysis emphasizes the importance of waiting for confirmatory bars and recognizing trap scenarios to manage risk effectively.
Future content plans include analysis of the 24-hour Bitcoin chart and practical strategies for intraday Bitcoin trading.
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Key Conclusions Small opening gaps often lead to complex price action with reversals rather than clear trending days, so traders should expect and prepare for range-bound or swing trading scenarios rather than strong directional moves.
Early strong bull breakout attempts that fail above the previous day’s high are warning signs for opening reversal setups, creating profitable short opportunities when confirmed by follow-through bear bars.
Traders who enter longs early during weak bull rallies risk becoming trapped, and bear signals following these trapped bulls tend to produce effective swing trades.
The formation of wedge tops combined with weak momentum typically precedes strong bear breakouts, especially when price breaks below important moving averages such as the EMA.
Swing trades based on strong bear signals during the session offered clear trade opportunities, reinforcing the value of price action setups over relying on indicators or volume alone.
