Potential Long Setup for Bitcoin:
The recent dramatic wick to the downside presents a distinct opportunity. Historically, 50% of such wicks tend to get filled. Consequently, a potential long entry could materialize around the $107,600 area, aiming to capitalize on a retracement to fill this wick. Placing a stop-loss just below the recent low ensures limited downside risk. This strategy prioritizes buying at a strong support area, where many retail traders may have been liquidated, often creating a bounce.
Potential Short Setup for Bitcoin:
If the market truly enters a bear phase, opportunities for short positions will emerge. Traders should look for corrective bounces on low volume to areas of resistance. Entering a short position at such a point, with a stop-loss above a recent high, offers a favorable risk-to-reward ratio. This approach prepares for a sustained downtrend while managing the inherent risk of trading against the broader trend.
Ultimately, navigating the aftermath of a Bitcoin crash requires discipline and an objective approach. Traders must prioritize risk management, including setting stop-losses and taking profits, regardless of market sentiment. Furthermore, observing both Bitcoin and altcoin performance, particularly the ETH/BTC pair, can provide critical clues for market direction and potential altcoin season. Whether the market is preparing for a new surge or a prolonged decline, prudent trading strategies remain paramount for preserving capital and seizing opportunities.
Bullish Scenario: Sustained Uptrend and Altcoin Season
Conversely, the bullish argument hinges on the observation that on the daily line chart, Bitcoin has not yet definitively broken its higher low structure. As long as daily candles close above the previous swing low, the overarching uptrend technically remains intact. Furthermore, the analysis of high volume spikes following significant dumps often correlates with temporary bottoms, historically leading to bounces and subsequent pushes to new all-time highs.
The speaker also examines the Ethereum (ETH) and Ethereum/Bitcoin (ETH/BTC) charts. The ETH/BTC chart shows signs of an extending fourth Elliott Wave correction, reaching the 0.382 Fibonacci level. If this correction completes and ETH/BTC bounces, it implies Ethereum is poised to outperform Bitcoin. This scenario could lead to a localized “altcoin season,” where Ethereum and other altcoins achieve new all-time highs, even if Bitcoin sees only a corrective bounce rather than a new all-time high in the immediate term. This suggests that while Bitcoin might consolidate or correct further, certain altcoins could still experience significant rallies, offering trading opportunities.
Identifying Trading Opportunities Amidst Uncertainty
In light of conflicting signals, the strategy shifts to identifying high-probability trading setups. The speaker advocates for a neutral approach, acknowledging the potential for both upward continuation and a deeper bear market. The core principle remains “buy low, sell high,” focusing on areas of support and resistance with stringent risk management.
Potential Long Setup for Bitcoin:
The recent dramatic wick to the downside presents a distinct opportunity. Historically, 50% of such wicks tend to get filled. Consequently, a potential long entry could materialize around the $107,600 area, aiming to capitalize on a retracement to fill this wick. Placing a stop-loss just below the recent low ensures limited downside risk. This strategy prioritizes buying at a strong support area, where many retail traders may have been liquidated, often creating a bounce.
Potential Short Setup for Bitcoin:
If the market truly enters a bear phase, opportunities for short positions will emerge. Traders should look for corrective bounces on low volume to areas of resistance. Entering a short position at such a point, with a stop-loss above a recent high, offers a favorable risk-to-reward ratio. This approach prepares for a sustained downtrend while managing the inherent risk of trading against the broader trend.
Ultimately, navigating the aftermath of a Bitcoin crash requires discipline and an objective approach. Traders must prioritize risk management, including setting stop-losses and taking profits, regardless of market sentiment. Furthermore, observing both Bitcoin and altcoin performance, particularly the ETH/BTC pair, can provide critical clues for market direction and potential altcoin season. Whether the market is preparing for a new surge or a prolonged decline, prudent trading strategies remain paramount for preserving capital and seizing opportunities.
Bearish Scenario: The Rising Wedge and ABC Correction
One potential bearish scenario suggests that Bitcoin may have completed its five-wave impulse towards the upside, including a complex W-X-Y-X-Z correction within the overall structure. If this Elliott Wave count proves accurate, it implies that a larger ABC corrective wave structure is likely to unfold. Such a correction could span months or even years, pushing Bitcoin to significantly lower price targets, potentially below the $100,000 area. This outlook suggests that the rising wedge pattern, often considered a bearish reversal pattern, has completed, ushering in a bear market.
Bullish Scenario: Sustained Uptrend and Altcoin Season
Conversely, the bullish argument hinges on the observation that on the daily line chart, Bitcoin has not yet definitively broken its higher low structure. As long as daily candles close above the previous swing low, the overarching uptrend technically remains intact. Furthermore, the analysis of high volume spikes following significant dumps often correlates with temporary bottoms, historically leading to bounces and subsequent pushes to new all-time highs.
The speaker also examines the Ethereum (ETH) and Ethereum/Bitcoin (ETH/BTC) charts. The ETH/BTC chart shows signs of an extending fourth Elliott Wave correction, reaching the 0.382 Fibonacci level. If this correction completes and ETH/BTC bounces, it implies Ethereum is poised to outperform Bitcoin. This scenario could lead to a localized “altcoin season,” where Ethereum and other altcoins achieve new all-time highs, even if Bitcoin sees only a corrective bounce rather than a new all-time high in the immediate term. This suggests that while Bitcoin might consolidate or correct further, certain altcoins could still experience significant rallies, offering trading opportunities.
Identifying Trading Opportunities Amidst Uncertainty
In light of conflicting signals, the strategy shifts to identifying high-probability trading setups. The speaker advocates for a neutral approach, acknowledging the potential for both upward continuation and a deeper bear market. The core principle remains “buy low, sell high,” focusing on areas of support and resistance with stringent risk management.
Potential Long Setup for Bitcoin:
The recent dramatic wick to the downside presents a distinct opportunity. Historically, 50% of such wicks tend to get filled. Consequently, a potential long entry could materialize around the $107,600 area, aiming to capitalize on a retracement to fill this wick. Placing a stop-loss just below the recent low ensures limited downside risk. This strategy prioritizes buying at a strong support area, where many retail traders may have been liquidated, often creating a bounce.
Potential Short Setup for Bitcoin:
If the market truly enters a bear phase, opportunities for short positions will emerge. Traders should look for corrective bounces on low volume to areas of resistance. Entering a short position at such a point, with a stop-loss above a recent high, offers a favorable risk-to-reward ratio. This approach prepares for a sustained downtrend while managing the inherent risk of trading against the broader trend.
Ultimately, navigating the aftermath of a Bitcoin crash requires discipline and an objective approach. Traders must prioritize risk management, including setting stop-losses and taking profits, regardless of market sentiment. Furthermore, observing both Bitcoin and altcoin performance, particularly the ETH/BTC pair, can provide critical clues for market direction and potential altcoin season. Whether the market is preparing for a new surge or a prolonged decline, prudent trading strategies remain paramount for preserving capital and seizing opportunities.
Key Risk Management Principles:
- Implement Stop-Losses: Always define your maximum acceptable loss per trade and set a stop-loss order. A market order stop-loss ensures immediate exit when a trade is invalidated.
- Appropriate Position Sizing: Avoid overleveraging. Risk only a small percentage of your total capital on any single trade to prevent a single bad trade from wiping out your account.
- Take Profits Incrementally: Even in an uptrend, consider scaling out of positions as price targets are met. This allows you to lock in gains and reduce exposure to potential reversals.
- Learn from Mistakes: Trading losses are inevitable learning opportunities. Analyze what went wrong and adjust your strategy accordingly. The market, as the speaker notes, “humbles us all eventually.”
Future Scenarios: Bull Market Continuation or Bear Market Onset?
The critical question remains: Is the current downturn the beginning of a prolonged bear market, or merely a significant correction within an ongoing bull market? The video explores both possibilities through the lens of Elliott Wave Theory and broader market sentiment.
Bearish Scenario: The Rising Wedge and ABC Correction
One potential bearish scenario suggests that Bitcoin may have completed its five-wave impulse towards the upside, including a complex W-X-Y-X-Z correction within the overall structure. If this Elliott Wave count proves accurate, it implies that a larger ABC corrective wave structure is likely to unfold. Such a correction could span months or even years, pushing Bitcoin to significantly lower price targets, potentially below the $100,000 area. This outlook suggests that the rising wedge pattern, often considered a bearish reversal pattern, has completed, ushering in a bear market.
Bullish Scenario: Sustained Uptrend and Altcoin Season
Conversely, the bullish argument hinges on the observation that on the daily line chart, Bitcoin has not yet definitively broken its higher low structure. As long as daily candles close above the previous swing low, the overarching uptrend technically remains intact. Furthermore, the analysis of high volume spikes following significant dumps often correlates with temporary bottoms, historically leading to bounces and subsequent pushes to new all-time highs.
The speaker also examines the Ethereum (ETH) and Ethereum/Bitcoin (ETH/BTC) charts. The ETH/BTC chart shows signs of an extending fourth Elliott Wave correction, reaching the 0.382 Fibonacci level. If this correction completes and ETH/BTC bounces, it implies Ethereum is poised to outperform Bitcoin. This scenario could lead to a localized “altcoin season,” where Ethereum and other altcoins achieve new all-time highs, even if Bitcoin sees only a corrective bounce rather than a new all-time high in the immediate term. This suggests that while Bitcoin might consolidate or correct further, certain altcoins could still experience significant rallies, offering trading opportunities.
Identifying Trading Opportunities Amidst Uncertainty
In light of conflicting signals, the strategy shifts to identifying high-probability trading setups. The speaker advocates for a neutral approach, acknowledging the potential for both upward continuation and a deeper bear market. The core principle remains “buy low, sell high,” focusing on areas of support and resistance with stringent risk management.
Potential Long Setup for Bitcoin:
The recent dramatic wick to the downside presents a distinct opportunity. Historically, 50% of such wicks tend to get filled. Consequently, a potential long entry could materialize around the $107,600 area, aiming to capitalize on a retracement to fill this wick. Placing a stop-loss just below the recent low ensures limited downside risk. This strategy prioritizes buying at a strong support area, where many retail traders may have been liquidated, often creating a bounce.
Potential Short Setup for Bitcoin:
If the market truly enters a bear phase, opportunities for short positions will emerge. Traders should look for corrective bounces on low volume to areas of resistance. Entering a short position at such a point, with a stop-loss above a recent high, offers a favorable risk-to-reward ratio. This approach prepares for a sustained downtrend while managing the inherent risk of trading against the broader trend.
Ultimately, navigating the aftermath of a Bitcoin crash requires discipline and an objective approach. Traders must prioritize risk management, including setting stop-losses and taking profits, regardless of market sentiment. Furthermore, observing both Bitcoin and altcoin performance, particularly the ETH/BTC pair, can provide critical clues for market direction and potential altcoin season. Whether the market is preparing for a new surge or a prolonged decline, prudent trading strategies remain paramount for preserving capital and seizing opportunities.
Market Structure and Moving Averages
A deeper dive into market structure provides additional clarity. Using a line chart, which often smooths out volatile wicks, the analysis revealed that despite the dramatic price drop, Bitcoin had not yet formed a definitive bearish market structure on the daily timeframe by failing to close a daily candle below the previous low. This distinction between wicks (temporary price excursions) and candle closes (sustained price action) is vital for accurate trend identification. However, the movement of Exponential Moving Averages (EMAs) presented a more cautious outlook.
While the daily timeframe still held an uptrend, the 4-hourly EMA (50 above 200) was converging, signaling a potential cross into a downtrend. The 2-hourly EMA was on the verge of crossing, and the 1-hourly EMA had already confirmed a bearish cross. These developments indicated that, at a granular level, the market was transitioning into an average downtrend, suggesting traders should exercise increased caution.
The Imperative of Risk Management in Crypto Trading
The recent market turbulence serves as a stark reminder of the non-negotiable importance of risk management. The speaker emphasizes that even experienced traders do not achieve a 100% win rate. Losses are an inherent part of trading, but how one manages those losses dictates long-term profitability.
One primary takeaway is the absolute necessity of stop-losses. The speaker recounted how his own long positions, despite good entry points, were stopped out at break-even due to the sudden market reversal. This proactive approach prevented catastrophic losses, unlike those experienced by many others who, lacking stop-losses or proper position sizing, saw their entire portfolios decimated. A famous trading adage holds true: “No one has gotten broke taking profits.” This highlights the dual importance of not only cutting losses short but also securing gains along the way, even within a strong uptrend.
Key Risk Management Principles:
- Implement Stop-Losses: Always define your maximum acceptable loss per trade and set a stop-loss order. A market order stop-loss ensures immediate exit when a trade is invalidated.
- Appropriate Position Sizing: Avoid overleveraging. Risk only a small percentage of your total capital on any single trade to prevent a single bad trade from wiping out your account.
- Take Profits Incrementally: Even in an uptrend, consider scaling out of positions as price targets are met. This allows you to lock in gains and reduce exposure to potential reversals.
- Learn from Mistakes: Trading losses are inevitable learning opportunities. Analyze what went wrong and adjust your strategy accordingly. The market, as the speaker notes, “humbles us all eventually.”
Future Scenarios: Bull Market Continuation or Bear Market Onset?
The critical question remains: Is the current downturn the beginning of a prolonged bear market, or merely a significant correction within an ongoing bull market? The video explores both possibilities through the lens of Elliott Wave Theory and broader market sentiment.
Bearish Scenario: The Rising Wedge and ABC Correction
One potential bearish scenario suggests that Bitcoin may have completed its five-wave impulse towards the upside, including a complex W-X-Y-X-Z correction within the overall structure. If this Elliott Wave count proves accurate, it implies that a larger ABC corrective wave structure is likely to unfold. Such a correction could span months or even years, pushing Bitcoin to significantly lower price targets, potentially below the $100,000 area. This outlook suggests that the rising wedge pattern, often considered a bearish reversal pattern, has completed, ushering in a bear market.
Bullish Scenario: Sustained Uptrend and Altcoin Season
Conversely, the bullish argument hinges on the observation that on the daily line chart, Bitcoin has not yet definitively broken its higher low structure. As long as daily candles close above the previous swing low, the overarching uptrend technically remains intact. Furthermore, the analysis of high volume spikes following significant dumps often correlates with temporary bottoms, historically leading to bounces and subsequent pushes to new all-time highs.
The speaker also examines the Ethereum (ETH) and Ethereum/Bitcoin (ETH/BTC) charts. The ETH/BTC chart shows signs of an extending fourth Elliott Wave correction, reaching the 0.382 Fibonacci level. If this correction completes and ETH/BTC bounces, it implies Ethereum is poised to outperform Bitcoin. This scenario could lead to a localized “altcoin season,” where Ethereum and other altcoins achieve new all-time highs, even if Bitcoin sees only a corrective bounce rather than a new all-time high in the immediate term. This suggests that while Bitcoin might consolidate or correct further, certain altcoins could still experience significant rallies, offering trading opportunities.
Identifying Trading Opportunities Amidst Uncertainty
In light of conflicting signals, the strategy shifts to identifying high-probability trading setups. The speaker advocates for a neutral approach, acknowledging the potential for both upward continuation and a deeper bear market. The core principle remains “buy low, sell high,” focusing on areas of support and resistance with stringent risk management.
Potential Long Setup for Bitcoin:
The recent dramatic wick to the downside presents a distinct opportunity. Historically, 50% of such wicks tend to get filled. Consequently, a potential long entry could materialize around the $107,600 area, aiming to capitalize on a retracement to fill this wick. Placing a stop-loss just below the recent low ensures limited downside risk. This strategy prioritizes buying at a strong support area, where many retail traders may have been liquidated, often creating a bounce.
Potential Short Setup for Bitcoin:
If the market truly enters a bear phase, opportunities for short positions will emerge. Traders should look for corrective bounces on low volume to areas of resistance. Entering a short position at such a point, with a stop-loss above a recent high, offers a favorable risk-to-reward ratio. This approach prepares for a sustained downtrend while managing the inherent risk of trading against the broader trend.
Ultimately, navigating the aftermath of a Bitcoin crash requires discipline and an objective approach. Traders must prioritize risk management, including setting stop-losses and taking profits, regardless of market sentiment. Furthermore, observing both Bitcoin and altcoin performance, particularly the ETH/BTC pair, can provide critical clues for market direction and potential altcoin season. Whether the market is preparing for a new surge or a prolonged decline, prudent trading strategies remain paramount for preserving capital and seizing opportunities.
The cryptocurrency market, particularly Bitcoin, recently experienced a significant downturn, leaving many traders with substantial losses and heightened uncertainty. As the accompanying video highlights, this sharp correction prompted widespread liquidations across the market. Navigating such volatile periods demands a clear understanding of market dynamics, technical analysis, and robust risk management strategies to safeguard capital and identify potential opportunities. This in-depth analysis delves into the recent market action, explores key indicators, and outlines actionable trading approaches, drawing upon the insights shared in the video while offering expanded context and practical guidance.
Understanding the Recent Bitcoin Crash and Market Volatility
The cryptocurrency market was shaken by a dramatic price drop, with Bitcoin leading the decline. Following a surge to a new all-time high of approximately $126,000 on October 6, 2025, the flagship cryptocurrency experienced a sharp rejection, plummeting to around $102,000 USD. This sudden Bitcoin crash triggered a cascade of negative effects across the entire digital asset ecosystem.
Consequently, altcoins bore the brunt of this downward pressure, with many experiencing significant losses, some dropping by as much as 80%. This widespread depreciation created immense pressure on leveraged positions, leading to an astonishing amount of liquidations. The market witnessed roughly $20 billion in total liquidations, with a staggering $17 billion of that figure attributed to long positions wiped out in a single, impulsive candle movement. This event underscores the extreme volatility inherent in cryptocurrency trading and the critical importance of prudent risk management.
Technical Analysis: Unpacking the Bearish Signals
Despite an initially bullish outlook, certain technical indicators began to signal a potential shift in market sentiment. Initially, the market displayed characteristics of a strong uptrend. Higher highs and higher lows dominated the 4-hourly and 2-hourly time frames, suggesting sustained upward momentum. Furthermore, indicators such as the Relative Strength Index (RSI) and Money Flow indicator showed hidden bullish divergences, often a precursor to further price appreciation. Bullish absorption evident in the order flow also supported the continuation of the uptrend.
However, the narrative began to change when Bitcoin’s price moved below a crucial volume level. The speaker in the video specifically points out the significance of the Value Area High (VAH) from a volume profile analysis. Trading below the VAH impulsively, without any significant reaction at the 0.382 Fibonacci retracement level (around $119,500), was a critical bearish indication. This acceptance below the VAH suggested a rotation back towards the Value Area Low (VAL), which subsequently materialized, leading to further price erosion.
Market Structure and Moving Averages
A deeper dive into market structure provides additional clarity. Using a line chart, which often smooths out volatile wicks, the analysis revealed that despite the dramatic price drop, Bitcoin had not yet formed a definitive bearish market structure on the daily timeframe by failing to close a daily candle below the previous low. This distinction between wicks (temporary price excursions) and candle closes (sustained price action) is vital for accurate trend identification. However, the movement of Exponential Moving Averages (EMAs) presented a more cautious outlook.
While the daily timeframe still held an uptrend, the 4-hourly EMA (50 above 200) was converging, signaling a potential cross into a downtrend. The 2-hourly EMA was on the verge of crossing, and the 1-hourly EMA had already confirmed a bearish cross. These developments indicated that, at a granular level, the market was transitioning into an average downtrend, suggesting traders should exercise increased caution.
The Imperative of Risk Management in Crypto Trading
The recent market turbulence serves as a stark reminder of the non-negotiable importance of risk management. The speaker emphasizes that even experienced traders do not achieve a 100% win rate. Losses are an inherent part of trading, but how one manages those losses dictates long-term profitability.
One primary takeaway is the absolute necessity of stop-losses. The speaker recounted how his own long positions, despite good entry points, were stopped out at break-even due to the sudden market reversal. This proactive approach prevented catastrophic losses, unlike those experienced by many others who, lacking stop-losses or proper position sizing, saw their entire portfolios decimated. A famous trading adage holds true: “No one has gotten broke taking profits.” This highlights the dual importance of not only cutting losses short but also securing gains along the way, even within a strong uptrend.
Key Risk Management Principles:
- Implement Stop-Losses: Always define your maximum acceptable loss per trade and set a stop-loss order. A market order stop-loss ensures immediate exit when a trade is invalidated.
- Appropriate Position Sizing: Avoid overleveraging. Risk only a small percentage of your total capital on any single trade to prevent a single bad trade from wiping out your account.
- Take Profits Incrementally: Even in an uptrend, consider scaling out of positions as price targets are met. This allows you to lock in gains and reduce exposure to potential reversals.
- Learn from Mistakes: Trading losses are inevitable learning opportunities. Analyze what went wrong and adjust your strategy accordingly. The market, as the speaker notes, “humbles us all eventually.”
Future Scenarios: Bull Market Continuation or Bear Market Onset?
The critical question remains: Is the current downturn the beginning of a prolonged bear market, or merely a significant correction within an ongoing bull market? The video explores both possibilities through the lens of Elliott Wave Theory and broader market sentiment.
Bearish Scenario: The Rising Wedge and ABC Correction
One potential bearish scenario suggests that Bitcoin may have completed its five-wave impulse towards the upside, including a complex W-X-Y-X-Z correction within the overall structure. If this Elliott Wave count proves accurate, it implies that a larger ABC corrective wave structure is likely to unfold. Such a correction could span months or even years, pushing Bitcoin to significantly lower price targets, potentially below the $100,000 area. This outlook suggests that the rising wedge pattern, often considered a bearish reversal pattern, has completed, ushering in a bear market.
Bullish Scenario: Sustained Uptrend and Altcoin Season
Conversely, the bullish argument hinges on the observation that on the daily line chart, Bitcoin has not yet definitively broken its higher low structure. As long as daily candles close above the previous swing low, the overarching uptrend technically remains intact. Furthermore, the analysis of high volume spikes following significant dumps often correlates with temporary bottoms, historically leading to bounces and subsequent pushes to new all-time highs.
The speaker also examines the Ethereum (ETH) and Ethereum/Bitcoin (ETH/BTC) charts. The ETH/BTC chart shows signs of an extending fourth Elliott Wave correction, reaching the 0.382 Fibonacci level. If this correction completes and ETH/BTC bounces, it implies Ethereum is poised to outperform Bitcoin. This scenario could lead to a localized “altcoin season,” where Ethereum and other altcoins achieve new all-time highs, even if Bitcoin sees only a corrective bounce rather than a new all-time high in the immediate term. This suggests that while Bitcoin might consolidate or correct further, certain altcoins could still experience significant rallies, offering trading opportunities.
Identifying Trading Opportunities Amidst Uncertainty
In light of conflicting signals, the strategy shifts to identifying high-probability trading setups. The speaker advocates for a neutral approach, acknowledging the potential for both upward continuation and a deeper bear market. The core principle remains “buy low, sell high,” focusing on areas of support and resistance with stringent risk management.
Potential Long Setup for Bitcoin:
The recent dramatic wick to the downside presents a distinct opportunity. Historically, 50% of such wicks tend to get filled. Consequently, a potential long entry could materialize around the $107,600 area, aiming to capitalize on a retracement to fill this wick. Placing a stop-loss just below the recent low ensures limited downside risk. This strategy prioritizes buying at a strong support area, where many retail traders may have been liquidated, often creating a bounce.
Potential Short Setup for Bitcoin:
If the market truly enters a bear phase, opportunities for short positions will emerge. Traders should look for corrective bounces on low volume to areas of resistance. Entering a short position at such a point, with a stop-loss above a recent high, offers a favorable risk-to-reward ratio. This approach prepares for a sustained downtrend while managing the inherent risk of trading against the broader trend.
Ultimately, navigating the aftermath of a Bitcoin crash requires discipline and an objective approach. Traders must prioritize risk management, including setting stop-losses and taking profits, regardless of market sentiment. Furthermore, observing both Bitcoin and altcoin performance, particularly the ETH/BTC pair, can provide critical clues for market direction and potential altcoin season. Whether the market is preparing for a new surge or a prolonged decline, prudent trading strategies remain paramount for preserving capital and seizing opportunities.
