Bitcoin is about to choose a direction, how to respond flexibly | Special Analysis

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Odaily Specially Invites Market Analyst Conaldo, a Master of Financial Statistics from Columbia University in the United States. Since university, he has focused on US stock quantitative trading and gradually expanded into digital assets such as Bitcoin. He has built a systematic quantitative trading model and risk control system through practical experience; possesses keen data insights into market fluctuations, and is committed to deepening his expertise in professional trading, pursuing steady returns. Every week, he delves into BTC technical, macroeconomic, capital flow changes, reviews and demonstrates practical strategies, previews major upcoming events worth noting for reference.

Weekly Market Summary:

Strategy Implementation (Short-term) Effectiveness Verification: Last week’s trades strictly followed the established strategy, successfully completed two operations, with a total profit of 3.62%.

Core View (Short-term) Verification: Our core view last week was that “the market will present wide-range oscillations,” which has been perfectly validated by market movements. The defined core observation zone of $89,500–$91,000 and the support zone below of $86,500–$87,500 have been tested repeatedly. Notably, last week’s price touched a high of $90,598, only 402 dollars below our upper core region ($91,000); during midweek, the dip to $86,400 was only 100 dollars above the lower support (86,500), confirming the accuracy of our point predictions.

From a macro technical perspective, since Bitcoin hit a historical high of $126,200 on October 6, the correction has lasted 82 days, with a maximum decline of about 36%, confirming a medium-term downtrend. However, based on multiple technical indicators, the current price has entered a low-position zone, with the duration and space of the correction gradually approaching typical oversold conditions. Since November 22, the price has been oscillating in a low range, indicating that bulls and bears are relatively balanced, and the momentum for a directional breakout is accumulating. Although the market’s “bullish” voices are rising, we believe that, excluding sudden news disruptions, a key possibility remains: if the market is dominated by major funds, a better strategy for bears might be to break downward first, breaching the psychological key level of $80,000, to clear remaining long positions through panic, completing a final bottoming process. Afterwards, capital can follow the trend to “flip short to long,” rapidly pushing the price out of the cost zone, and initiating a relatively strong technical recovery. It’s important to emphasize that the above scenario is a logical deduction based on market behavior and not an inevitable path. Regardless of how the market evolves, the key principle remains: “The market is always right.” Before choosing a direction, maintaining observation and flexible response is crucial at this stage.

1. Last Week’s Trading Results Review: (12.22–12.28)

2. Short-term Trading Review (No leverage):

• First trade ( profit 2.27%): Based on the “rebound encountering resistance at core pressure zone for shorting” pattern. When the price hit resistance in the $89,500–$91,000 zone, combined with a spread trading model signaling a top, a 30% short position was established, and profits were taken near the support zone after the price fell back.

• Second trade ( profit 1.35%): Same logic as above. When the price hit resistance in the $89,500–$91,000 zone again, combined with resonance signals from two models, the trade was successfully completed.

2. Last Week’s Market Movement Forecast and Operation Strategy Review:

In last week’s forward-looking analysis, it was clearly stated that: the market is expected to mainly oscillate within a wide range. The core observation zone is $89,500–$91,000, and the outcome of the contest in this zone will determine the short-term trend. Below is a review and analysis of the strategy.

① Market Trend Forecast:

• Core resistance levels: First resistance at $89,500–$91,000; second resistance at $93,000–$94,500.

• Core support levels: First support at $86,500–$87,500; second support at $83,500–$84,500.

② Operation Strategy Review:

• Mid-term strategy: Maintain about 65% of mid-term positions (shorts).

• Short-term strategy: Last week, we initially drafted two short-term plans A/B. Based on actual market movements, we ultimately adopted Plan B as the core strategy and executed it.

(Plan B: Rebound validation, core zone of $89,500–$91,000 has been effectively broken down)

• Opening position: When resistance signals appear during rebound validation, establish a 30% short position.

• Risk control: Stop-loss set above $92,000.

• Closing position: When the price dips to the $83,500–$84,500 zone and resistance appears, consider partial or full liquidation to realize profits.

2. Technical Analysis: Mid-term Trend Judgment of Bitcoin

Combining last week’s market operation, the author will use multi-dimensional analysis models to deeply analyze the internal structure and trend evolution of Bitcoin.

Bitcoin Weekly K-line Chart: (Momentum Quantification Model + Sentiment Quantification Model)

Figure 2

1. As shown in (Figure 2), from weekly analysis:

• Momentum Quantification Model: After last week’s correction, both momentum indicator lines remain below zero, with negative momentum bars gradually shortening, indicating that although the weekly trend has entered a bearish market, the bearish momentum has not been fully released.

Momentum Model suggests: Bitcoin’s downward index: High

• Sentiment Quantification Model: Blue sentiment line value 49.74, strength zero; yellow sentiment line value 19.99 (close to low threshold), strength zero, peak value is 0.

Sentiment Model suggests: Price pressure and support index: Neutral

• Digital Monitoring Model: Bitcoin has broken the bullish-bearish dividing line (yellow-blue lines) for 6 weeks; short-term bottom signals (above 9) have not appeared.

These data indicate that the weekly chart has established a bearish trend, and subsequent bearish force release should be watched carefully.

Bitcoin Daily K-line Chart:

Figure 3

2. As shown in (Figure 3), from daily analysis:

• Momentum Quantification Model: During last week’s movement, the two momentum lines nearly converged, slowly rising below zero and approaching zero. Due to holidays, daily trading volume continued to shrink, with no significant change in positive momentum bars.

Momentum Model suggests: Buying momentum is weak, volume bars shrink to “star” shape, indicating that bulls and bears are temporarily balanced.

• Sentiment Quantification Model: After last Sunday’s close, blue sentiment line value 16 (near low threshold), strength zero; yellow sentiment line value 40, strength zero.

Sentiment Model suggests: Pressure and support index: Neutral

These data imply that the daily chart is in a bearish market, and the market will soon choose a direction.

3. This Week’s Bitcoin Market Forecast: (12.29–01.04)

4. It is highly likely that the market will mainly oscillate and test lows this week, with the core observation zone at $86,000–$86,500.

• If effectively broken down: the price may continue to decline, testing support zones at $83,500–$84,500.

• If effectively stabilized: the market may continue oscillating within the current range of $86,500–$91,000.

2. Core Resistance Levels:

• First resistance zone: $89,500–$91,000

• Second resistance zone: $93,000–$94,500

• Important resistance zone: near $97,000

3. Core Support Levels:

• First support zone: $86,000–$86,500

• Second support zone: $83,500–$84,500

• Important support zone: near $80,000

4. This Week’s Bitcoin Trading Strategies (Excluding Unexpected News Impact): (12.29–01.04)

5. Mid-term strategy: Maintain about 65% of mid-term positions (shorts).

6. Short-term strategy: Use 30% of positions, set stop-loss points based on support and resistance levels, and look for “spread” trading opportunities. (Use 30-minute cycle for operations).

7. Focus on the contest between bulls and bears over the $86,000–$86,500 zone. To respond to market evolution, two short-term plans A/B are drafted:

• Plan A: If effectively stabilized above $86,000–$86,500:

• Open position: When the price rebounds to the $89,500–$91,000 zone and resistance signals appear, establish a 30% short position.

• Risk control: Stop-loss set above $92,500.

• Close position: When the price falls to the $86,000–$86,500 zone and shows signs of stabilization, close all shorts to realize profits.

• Plan B: If effectively broken below $86,000–$86,500:

• Open position: If the price effectively breaks down, establish a 30% short position.

• Risk control: Stop-loss set above $88,000.

• Close position: When the price drops to the $83,500–$84,500 zone and shows signs of stabilization, gradually close to realize profits.

5. Special Reminders:

6. When opening a position: immediately set an initial stop-loss.

7. When profit reaches 1%: move the stop-loss to the opening cost price (break-even point) to ensure capital safety.

8. When profit reaches 2%: move the stop-loss to the position of 1% profit.

9. Continuous tracking: thereafter, for every additional 1% profit, move the stop-loss by 1% accordingly, dynamically protecting and locking in profits.

(Note: The above 1% profit trigger threshold can be flexibly adjusted according to individual risk preferences and asset volatility.)

6. This Week’s Key Event Preview: (12.29–01.04)

7. Federal Reserve Meeting Minutes Signal “Real Divergences”

On Wednesday at 03:00, the Federal Reserve will release the latest monetary policy meeting minutes. Compared to the rate decision itself, the more critical aspect is the divergence among internal members regarding “timing, magnitude, and persistence of rate cuts.”

If the minutes show increased confidence among officials about inflation easing and discuss an earlier or faster easing path, it will reinforce market expectations of “real interest rate decline,” providing medium-term bullishness for Bitcoin; conversely, if the minutes emphasize concerns about persistent inflation or overly rapid easing of financial conditions, it may temporarily boost the dollar and US Treasury yields, exerting emotional pressure on BTC.

For Bitcoin, this is not a short-term directional signal but an important node influencing medium-term capital pricing anchors.

2. Initial Jobless Claims: A Thermometer of Liquidity Expectations

On Wednesday at 21:30, the US will announce initial jobless claims for the week ending December 27.

Current market focus is more on whether the “labor market shows signs of structural cooling,” rather than on single data fluctuations.

If initial claims remain persistently above trend levels, it will further validate the economic cooling logic, strengthen expectations of continued easing, and benefit valuation recovery of non-yield assets like Bitcoin; if the data declines again, it may reinforce the view that “the economy remains resilient,” which is unfavorable for BTC risk appetite expansion in the short term.

This indicator’s impact on Bitcoin mainly manifests through interest rate expectations rather than the fundamentals themselves.

3. Manufacturing PMI Final: Validating the Real Economy’s Direction

On Friday at 22:45, the US December S&P Global Manufacturing PMI final will be released.

As a leading indicator, PMI helps the market judge whether a “soft landing” is still on track.

If the final confirms manufacturing stabilization or improvement, overall risk asset sentiment may remain stable, with limited systemic pressure on BTC; if PMI is revised downward again, it may trigger a re-pricing of economic downturn risks, short-term negative for risk assets, but in the medium to long term, it could strengthen expectations of monetary easing.

Financial markets are ever-changing; all market analysis and trading strategies need to be dynamically adjusted. All viewpoints, analysis models, and operational strategies involved in this article are based on personal technical analysis, for personal trading logs only, and do not constitute any investment advice or operational basis. Markets carry risks; invest cautiously. DYOR.