As the FOMC's pivotal meeting approaches, Bitcoin is entering a high-stakes phase, hovering within a well-defined price range. This period presents traders with both risks and opportunities. In-depth technical analysis of 1-hour and 4-hour charts reveals key levels to monitor for potential gains amidst the upcoming volatility.
On the 1-hour Bitcoin chart, a scalp opportunity (a quick trade) is emerging. The favored scenario anticipates a bounce from the current support zone. For aggressive traders, a long position (buy) could be considered around $88,200. The goal of this trade would be to capture the liquidity present in the upper part of the range, with a take profit target at $91,400.
To manage risk, a stop loss order would be placed just below the support at $87,200. This trade offers an attractive risk/reward ratio for those anticipating a technical bounce ahead of the FOMC announcement.
However, zooming out to the 4-hour chart, the outlook is more bearish. The current market structure suggests that the short-term bounce may only be a prelude to a larger drop.
The most probable scenario is a return of price toward the bottom of the trading range, heading toward the significant order block (zone of concentrated orders) located around $83,000. This zone has already served as support in the past and will act as a magnet for price, especially if the FOMC announcement disappoints market expectations.
Financial markets often tend not to simply test obvious support levels. There is a strong chance that Bitcoin will hunt for liquidity just below the bottom of the range, executing a quick wick down to $81,000. This move, called a “deviation” or “stop hunt,” aims to trap traders who have placed their sell orders just below support.
For patient investors, this swing failure pattern scenario would represent an excellent accumulation opportunity, buying Bitcoin at a discounted price in anticipation of the bounce that typically follows this type of bearish trap.
In conclusion, the week promises to be volatile for Bitcoin. While a short-term bullish scalp opportunity exists, the underlying 4-hour trend points toward a correction. Traders will need to exercise caution, particularly around the FOMC announcement. The $83,000 zone is the first major appointment, but the $81,000 zone could be the real buying opportunity for those who can keep their composure. The key will be not getting trapped by false moves and sticking to a well-defined strategy.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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