Bitcoin Futures Technical Analysis – January 8, 2025
Financial Instrument: Bitcoin Futures
Price at the Time of Analysis: $96,095
Key Levels to Watch for Bitcoin Futures (BTC)
Bullish Above $96,930
-
Why Bullish Above?
A move above $96,930 would place the price above several key levels that currently act as resistance, yet also serve as price magnets pulling the market toward them:- $96,520: Today’s developing Value Area Low (VAL).
- $96,800: Approximate VWAP of today at the time of writing.
- $96,900: The Point of Control (POC) from three days ago.
Sustained price action above these levels signals that buyers are gaining control, increasing the likelihood of further bullish momentum.
-
Profit Targets for Long Positions:
- $97,300: A significant resistance level and potential target for partial profit-taking.
- $97,460: Today’s POC.
- $97,560: Today’s Value Area High (VAH), a logical level for additional profit-taking.
Bearish Below $96,200
-
Why Bearish Below?
A drop below $96,200 would place the price below both the low of day and the VWAP of December 29, indicating bearish pressure and increasing the probability of further downside. -
Profit Targets for Short Positions:
- $94,570: A key support level and potential area for partial profit-taking.
- $93,600: The Value Area Low (VAL) of December 31 and the end-of-year support level, offering a deeper bearish target.
Understanding the Tools Behind the Analysis
VWAP (Volume-Weighted Average Price)
VWAP represents the average price of Bitcoin Futures based on both price and volume. It provides traders with a benchmark for determining whether the current price is overvalued or undervalued:
- Above VWAP: Signals buyer strength and bullish momentum.
- Below VWAP: Indicates seller dominance and bearish pressure.
Value Area Concepts (VAH, VAL, POC)
- Value Area High (VAH): The upper boundary of the price range where 70% of volume traded, acting as resistance.
- Value Area Low (VAL): The lower boundary of the value area, often serving as support.
- Point of Control (POC): The price level with the highest traded volume, frequently acting as a magnet for price action.
Key Takeaways for Bitcoin Futures
- Bullish Scenario: Sustained price action above $96,930 opens the door to profit targets at $97,300, $97,460, and $97,560.
- Bearish Scenario: A break below $96,200 could lead to downside targets at $94,570 and $93,600.
Compass for Trading Decisions
This analysis acts as a map for traders:
- If the price struggles near $96,930 and reverses downward, traders might consider a short position, targeting a move back toward $96,200.
- Conversely, if the price sustains above $96,930, traders can follow the bullish path with the provided profit targets.
Partial profit-taking levels are provided for both scenarios to help traders lock in gains while managing risk effectively.
Trade at your own risk. Visit ForexLive.com for additional perspectives.
