Bitcoin Update: Swing Trading Strategy as Bitcoin Tests Resistance Levels

A technical analysis of Bitcoin’s current price action and strategic considerations as price targets are fulfilled

Point and Figure Target Reached

Bitcoin has reached an important milestone in its technical development. The Point and Figure (PnF) target that was previously identified has now been fulfilled. This represents a logical point to expect a pause in the upward momentum.

The CME Futures are particularly telling at this juncture, as they indicate there isn’t a substantial supply at the current resistance level. Our expectation from the spring setup was a test of this resistance level, with the possibility of reaching a second target. It’s encouraging to see that the complete target has been fulfilled.

It’s worth noting that we discussed this Bitcoin spring trade in real-time across various platforms, including Twitter classes.

Current Strategy Considerations

As Bitcoin tests these crucial resistance levels, the primary consideration for traders is volume analysis. The key observation is that you don’t want to see excessive volume at this stage. While today shows a down day, the supply signature remains relatively average, which is a positive signal.

Point and Figure Chart Analysis

The one-hour time frame point and figure chart (using 1% box size) clearly illustrates the spring setup in action. The chart demonstrates a significant strength rally as Bitcoin tests resistance levels. This baking action allows us to take a count of the structure, yielding a substantial target below the psychologically important $100,000 level.

This $100,000 threshold represents a major psychological level for traders. Even reputable analysts frequently discuss the power and significance of these big round numbers in market psychology.

Identifying Trading Ranges

The point and figure chart reveals two distinct trading ranges:

1. The original base
2. A re-accumulation trading range

Notably, the target from this short-term swing point and figure chart points to almost the same area as our original analysis, falling slightly below the major target.

Strategic Decision Point

As experienced traders often advise: “Once the target of a point-and-figure chart is fulfilled, stop, look, and listen.” This doesn’t necessarily mean Bitcoin must retreat to support levels. Rather, following Wyckoff methodology, we should expect at least some deterioration of demand or new supply entering the market.

This juncture represents a critical moment for traders who initiated positions during the spring setup. Options include:

1. Raising stop losses to protect gains
2. Taking partial profits (approximately 30% of gains) on short-term trades

It’s important to remember that these shorter-term trades were not initiated with the goal of a long-term campaign, but rather with the specific intention of capturing the move to resistance.

Near-Term Outlook

The analysis suggests Bitcoin will likely continue to interact with the psychologically significant $100,000 level in the coming period. The critical factor to monitor will be how much supply emerges at this resistance level, as this will determine whether traders should:

1. Exit positions completely
2. Take partial profits
3. Transition swing trades into longer-term positions

Conclusion

Bitcoin’s recent price action has fulfilled the predicted technical targets, creating a decision point for traders. The amount of supply that materializes at current resistance levels will be the determining factor in whether this remains a completed swing trade or becomes an opportunity to establish longer-term positions.

For traders who participated in the spring setup trade, this represents an ideal moment to evaluate position management strategies while closely monitoring supply and demand dynamics at these critical price levels.

This analysis is for educational purposes only.

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