Summary
This report analyzes the potential development of Bitcoin's price, market performance, and investment strategies. First, it explores in detail the three possible development patterns of the Bitcoin head and shoulders (H&S) formation, and predicts the market trends after Trump's administration. It is believed that the overall market performance is currently poor, lacking sustainability, and may persist for a while.
1. Analysis of the three development patterns of Bitcoin's head and shoulders
The current overall structure of Bitcoin presents a head and shoulders formation, with a trap at the right shoulder. The head and shoulders pattern typically has three possible development scenarios:
Top reversal structure: The classic head and shoulders formation usually indicates that the market will enter a downward phase.
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Consolidation continuation structure: This indicates that the market may temporarily correct before continuing to rise (low probability).
Level expansion: The head and shoulders formation transforms into a wedge structure or channel, and the level of market volatility will further expand.
Currently, the market has risen from 59,000 to 108,000 points, with the main factor being Trump's administration. As we approach critical time nodes, there is a high probability of 'buy the news, sell the facts,' which provides a basis for the formation of a top structure. However, this top does not necessarily mean that the market is about to crash, but may just be a temporary correction. After all, there is also space for favorable policy speculation after taking office.
2. Market trends after Trump's administration
Considering the potential further positive news that may arise after Trump's administration, including legal improvements and increases in national reserves, I believe that Bitcoin's current position has limited downside potential and not much upside potential. Especially in the case of 'buy the news, sell the facts,' the market may rise on Trump's inauguration day, but it may subsequently form level expansion.
Trading strategy recommendations
Based on the current analysis, I propose the following trading strategies:
Retracement range: If the price drops to the range of 86,000~89,000, consideration can be given to buying, waiting for the completion of the ABC correction.
Bear trap: If the head and shoulders formation drops directly, the extent may be significant, but I believe it will not fall to too low a level. The market is more likely to form a wedge structure after a decline, entering a bear trap.
Strong trend: If a strong upward trend forms at the right shoulder position, consideration can be given to chasing long positions.
Level expansion: If the market rises sharply and forms level expansion, close attention should be paid to the trend, and strategies should be adjusted to cope with volatility.
Overall, I tend to wait for the market to form a bear trap, observing the correction before making decisions. Additionally, considering the current oscillating trend in the market, trading should be more cautious to avoid frequent operations.
Conclusion and Outlook
The current trend of the Bitcoin market has multiple possibilities, and investors need to respond cautiously, especially in the current high position oscillation. It is recommended to maintain a flexible trading strategy, focusing on retracement and bear trap opportunities. For Ethereum, it is temporarily inadvisable to invest too heavily, as the market is still in a sluggish period.
Thank you for watching
This report and its contents are personal opinions and market analysis, and should not be considered as any form of investment advice or recommendation. All information is for reference only, and investment decisions should be made based on individual financial conditions, investment goals, and risk tolerance.
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