Bitcoin Bounces Back — Buying Opportunity?

The previous Bitcoin analysis highlighted that a close below the support zone identified on the daily timeframe would increase the likelihood of a decline below the Sell-Side Liquidity level. This scenario has now materialized, creating an environment that could present a compelling buying opportunity.

However, successful participation in this trade requires precise money management and adherence to key parameters to mitigate risk effectively.

4-hour time frame analysis

BTCUSD- 4 Hour Time Frame

Following yesterday’s liquidity sweep and the subsequent impulsive bullish reaction, Bitcoin's price has established a confirmed entry setup for buy positions. However, when analyzing the higher daily timeframe, a key resistance zone remains untested, marked on the attached chart as the upper orange zone.

While this setup offers a chance to enter buy positions, effective risk management is crucial. Traders are advised to initiate trades with half the usual volume. If the price closes above the upper resistance zone on the daily timeframe, the remaining half of the position can then be executed.

Bitcoin price target

Risk management plays a pivotal role in this setup. To minimize potential losses, it is essential to place a Stop Loss order below the internal low indicated on the chart.

Additionally, should the price close below the latest support zone on the four-hour timeframe, selling part of the position can provide a safety buffer. This ensures partial profit-taking while mitigating exposure if the price retraces to the final Stop Loss level.

For profit realization, the trade presents three significant targets. The first milestone is the psychological level of $100,000, which is expected to attract considerable market attention.

Beyond this level, holding the remaining position until the price surpasses critical Buy-Side Liquidity zones is recommended. This strategy aims to maximize potential gains in a bullish trend continuation.