Trader outlines what to expect after a week of Bitcoin gains

A practicing trader and founder of the Crypto Shaman project Crypto Shaman Vadim Shovkun.

Since the last overview, as expected, the price continued to move upward. Having now run into a serious resistance zone, it is necessary to understand what to expect from Bitcoin going forward.

Before analysing the cryptocurrency, one should look at the stock market, specifically the S&P 500 index.

As noted in the previous overview, 4,375 is an important level above which the price must hold. A breach of this level and the establishment of new highs would indicate that the stock market in the near term does not threaten the cryptocurrency market.

As noted in the analysis, within the framework of the analysis, which discussed how the Grayscale share unlock would affect Bitcoin’s reversal.

At present, the price has run into a strong selling zone — $40,700 to $41,600. It has advanced from $29,300 (+37%) with almost no pullbacks, and a decline remains possible.

The medium-term scenario’s zone of invalidation is the red-marked range $32,200-$34,070. Within this corridor, the forecast would be negated. If a powerful buyer is absorbed on July 26, the seller would seize the initiative.

Volume profile shows no significant seller at present. The main cluster of volumes remains lower down, signaling a bullish, expulsive dynamic.

Two scenarios are under consideration.

First, the price could continue to trade sideways at current levels for a while, then break out on strong volume. The upside targets would be around $45,000–$46,000 — ahead of this zone there are many stops and liquidations. One could attempt to trade this breakout pattern, but the probability of getting stopped out would be high.

Or wait for a move beyond the red zone. If this formation resembles a JOC, a JOC + BTC pattern (on retest) could yield a scalping long. This position would entail a lower risk of being stopped out. Of course, the entry should be refined after the pullback.

Second option — a pullback from current quotes. A UT pattern (liquidity grab in the red zone and a sharp return) may be forming now, ahead of the pullback. In this scenario, the importance of securing part of the position increases.

If the pullback occurs without UT formation, a shallower correction is expected. If the price starts to slide, the magnet will be at $36,358, beyond which there is liquidity. The movement potential here is a breakout. The chance of a false breakout in this scenario is very low, and stop orders would be triggered if the medium-term forecast were breached.

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