Bitcoin encountered a local peak near $86,500 due to a swing failure pattern, with current price action focusing on a target of $82,888, the Monday low. Order flow data confirms trapped long positions that are now at a loss, creating a downward price trajectory towards untapped liquidity. Observing potential price patterns at the Monday low could forecast bullish reversals, should they occur.
Bitcoin has potentially established a local peak near $86,500 following a swing failure pattern that targeted upside liquidity. Order flow analysis indicates that many aggressive long entries were effectively trapped at these highs, positioning the price towards lower liquidity, specifically around the Monday low of $82,888.
The focal point shifts to Bitcoin’s Monday low of $82,888, which remains a key liquidity area yet to be reached. This level may serve as a target for Bitcoin as it deviates between various liquidity pockets, often entrapping breakout traders and altering market momentum in the opposite direction.
Data suggests that with substantial long exposure now in a loss position, the market’s path of least resistance is downward, aiming for the unclaimed liquidity below. Recent price action highlights that the Monday low will potentially attract traders, particularly those who expected a reversal following Sunday’s price surge.
Sunday’s high produced significant liquidity, drawing in short traders anticipating a price pullback. However, when Bitcoin surpassed this level, it failed to maintain its position, resulting in a swing failure pattern that typically occurs when price invalidates a key high and then reverses sharply, thereby trapping long positions.
Critical insights are revealed through the order flow chart, which demonstrates 959 BTC in market orders initiated right after Bitcoin peaked at Sunday’s high. As these positions were entered at a local high, they are now at a loss, leading to a classic market trap dynamic capable of inciting aggressive downward movements due to stop-loss triggers.
The market is now poised to locate the next liquidity pool, situated at the Monday low of $82,888. This target aligns with intraday liquidity theory, suggesting that price will gravitate towards the cleanest untapped levels. If the Monday low is reached, it might result in a bullish swing failure mirroring the previous top pattern, completing a short-term range rotation and opening avenues for upward movement.
Traders should monitor closely for any price action regarding the potential sweep of Monday’s low at $82,888. Should a swing failure pattern develop at this level, it could indicate a high-probability long entry, targeting mid-range or higher prices. Until such patterns are confirmed, a bearish outlook remains dominant, emphasising the importance of prudent trading management and discretion in price action evaluations.
