New All-Time High for BTC: Weekly Market Outlook & Strategy

I. Weekly Market Review: Strong Breakout and Market Sentiment Analysis

Over the past week, Bitcoin (BTC) witnessed a significant price surge. Opening at $109,203.85, it hit a weekly low of $107,429.57 on Tuesday before a strong rebound. By Sunday, BTC soared to a new all-time high of $119,488.00, ultimately closing the week at $119,086.64. This represents an 8.29% weekly gain, with a maximum fluctuation of 11.04% and a trading volume of $11.914 billion. The weekly candlestick formed a large bullish candle with an upper wick, settling above the 5-week moving average.

In the author's previous weekly review, it was predicted that the overhead resistance for the week would be around $110,600, with bulls likely to test the previous high of $110,530. Investors were advised against chasing the rally, anticipating a pump-and-dump scenario followed by a retest of lower support levels. The first support was anticipated near $106,500, with strong support between $104,700 and $105,000. The author believed that if these support levels held, a strong rebound and continued high-level consolidation would likely ensue.

The actual market movement this week saw BTC open on Monday, push to $109,700 before encountering resistance and pulling back. On Tuesday, it accurately retested $107,429, finding stability there. However, starting Wednesday, Bitcoin rallied for three consecutive days, breaking through the prior high of $111,980 and establishing a new all-time high of $119,488. While the first half of the week largely aligned with the author's forecast, the latter half's strong upward momentum exceeded initial expectations. As of writing, Bitcoin's price has surpassed the $120,000 psychological barrier, indicating heightened bullish sentiment in the market.

Figure 1

Moving forward, the author will delve deeper into the changes observed in the market this week, using quantitative models and daily chart analysis:

1. Weekly Chart Analysis (As shown in Figure 1):

• Momentum Quant Model: This model continues to signal high-level overbought conditions (钝化信号). There is a significant probability of forming a momentum bearish divergence in the coming weeks. To negate this signal, bulls would need to execute a rapid, high-volume surge, which the author believes has a relatively low probability.

• Sentiment Quant Model: Sentiment Indicator 1 currently stands at 6.4 (on a scale of 0-10), while Sentiment Indicator 2 is approaching high levels. The Peak Indicator is at 0.67, suggesting an increase in multi-dimensional overhead pressure.

  

Figure 2

2. Daily Chart Analysis (As shown in Figure 2):

• Momentum Quant Model: The daily chart also consistently shows high-level overbought signals, indicating a high probability of forming a momentum bearish divergence in the next few days.

• Sentiment Quant Model: Sentiment Indicator 1 is at 5.1, and Sentiment Indicator 2 is nearing high levels, reinforcing the signals from the weekly chart.

• MACD Indicator: The fast and slow lines have formed a golden cross above the zero axis, which typically suggests continued upward momentum in the short term.

• Volume Analysis: Trading volume significantly increased during the initial ascent but has rapidly contracted in the last two days, which could imply a weakening of the upward momentum.

II. Next Week's Market Forecast: Range-Bound Consolidation and Key Support Levels

Based on the current market conditions and quantitative model signals, the author provides the following forecast for the upcoming week:

Current key resistance and support levels for Bitcoin are as follows:

• Overhead Resistance: The range between $123,000 and $126,000.

• Downward Support: The range between $111,980 and $110,530. This area represents critical support after the breakthrough of the previous high and warrants close attention.

The author believes that the probability of prices falling below the lower support range is relatively low. Given the gradual cooling of market sentiment, Bitcoin's price is more likely to engage in horizontal consolidation within this new range.

Figure 3

Fibonacci Retracement Analysis (As shown in Figure 3):Using the previous high support at $112,000 and the latest high resistance at $123,000 to draw the Fibonacci retracement levels, the following key positions are derived:

• 0.618 Retracement: Located at $118,900, coinciding with a minor platform support, making it a critical short-term support.

• 0.382 Retracement: Located at $116,500, also providing a degree of support.

From a microscopic perspective, between July 11th and 13th, the price consolidated within the 0.382 to 0.618 retracement range for two days before breaking out. With current market sentiment pulling back, prices may retrace towards this zone to re-validate the effectiveness of these support levels.

III. Next Week's Trading Strategy (Excluding Impact of Unexpected News)

The current market has broken through the previous high of $111,980, opening up new upside potential. However, from an overall structural perspective, the probability of a continuous, sharp unilateral ascent is low. The market is more likely to exhibit a pattern of slow, upward movement amidst consolidation. Therefore, the recommended strategy is primarily buying on dips, supplemented by Defensive light positions.

1. Mid-Term Position Strategy:The current price action remains above the upper rail of the bullish-bearish channel, indicating a prevailing strong bullish trend. Mid-term long positions should continue to be held; frequent operations are not advisable.

2. Short-Term Position Strategy:The hourly MACD indicator has formed a death cross above the zero axis, suggesting a short-term pullback risk. Based on key technical levels, the short-term strategy is as follows:

• a. If support near $118,900 holds effectively: Consider short-term long positions to participate in the rebound.

• b. If $118,900 is breached: It's advised to temporarily refrain from trading. Patiently observe if the market retraces to around $116,500. If support is confirmed and stabilizes there, consider buying in the lower range, and only resume long positions once the price reclaims $118,900.

• c. If $116,500 support is decisively breached: The short-term market may see a further pullback towards $112,000. At this point, one could consider shorting in line with the trend, or wait for new clear support signals before planning a rebound.

3. Other Recommendations:Investors are advised to continuously monitor the author's daily intra-day market commentary articles for real-time technical analysis and practical strategies. Throughout trading, it's crucial to manage positions and set stop-losses effectively to mitigate short-term volatility risks during market consolidation.

Disclaimer: The models and analysis presented above are personal trading rules adhered to by the author and do not constitute any basis for buying or selling. These are personal views and are for reference only.

Author: BitpushNews Cody Feng

Related Articles