The recent decline in the price of Bitcoin has increased the likelihood of further downward movement, creating the potential for adjustments in its future trajectory. While predicting whether this scenario will materialize remains uncertain, clear criteria can be established to determine when short-term buy orders might become invalid.

These guidelines provide a structured approach to risk management, helping protect portfolios from unnecessary losses.

Daily time frame analysis

BTCUSD - 1 Day Time Frame

For traders who initiated buy positions earlier this year, monitoring the key support zone on the daily timeframe is essential. This zone, formed during Bitcoin's bullish movement since January, serves as a critical safeguard for the current trend.

As long as the price respects this zone and does not close below its lower boundary, buy orders remain valid. Under these conditions, traders can maintain their positions at full volume with confidence.

However, if the price closes below the support zone’s lower boundary, the validity of buy orders will be compromised. This would increase the probability of further downward movement, potentially driving the price toward Sell-Side Liquidity.

Such a development could mark the beginning of a bearish phase, prompting traders to reevaluate their positions and strategies.

Bitcoin price target

At present, Bitcoin’s price action has not demonstrated significant liquidity selection, a factor that typically contributes to healthy market behavior. Coupled with the current surge of retail-driven optimism, this lack of liquidity selection suggests an unnatural market trend.

The resulting imbalance raises the likelihood of a correction, as the market seeks to stabilize and align with a more sustainable trajectory.

By closely monitoring the outlined support zone and remaining mindful of broader market dynamics, traders can better navigate this evolving landscape.

Adopting a disciplined approach will help mitigate risks while positioning traders to capitalize on emerging opportunities as they arise.