I opened a short on BTC – failed breakout

Not a trade recommendation

I opened a short BTC position at current levels for the following reasons:

Fundamental analysis

1. Multiple restrictions, from the banking sector to the crypto industry, are a strong headwind to the token’s appreciation.
2. On Tuesday, another UK bank restricted payments to crypto sites, and Paysafe, which provides British pound deposits and withdrawals to Binance, said it was ending the service by the end of May.
3. Combined with the failing banks that also provided some crypto services, these factors would significantly reduce the flow of money to the exchanges, meaning that there is no new money coming into the industry to support the price.< / li>

Technical Analysis

After yesterday’s hype rally on the release of the CPI data, Bitcoin failed to break the wide range, so I think a long squeeze from current levels is likely.

The price action signals strong Sell pressure, leaving a large needle above the range and many Long positions now trapped.

Hidden bearish divergence on the DeMarker Oscillator suggests to me that the uptrend is overheating and will begin to a decline around current levels.

I would add to the position at the close of today’s session below yesterday’s low of 24230.

Market Profile

Price initiated a breakout of the Value area and closed slightly above the upper limit, but I’m seeing some volatility in today’s session that makes me think the breakout may be a fake. If the price closes today below 24250, it will confirm the stay in the monthly range between 20250 – 24200.

Conclusion

I have an entry at current levels because the fundamentals remain negative and the technique gives early signals of a reversal. I expect first target 19800, second target 18500 and third target 16000.

Alternative scenario

A break and close above the current resistance 25000 – 25400 would signal the formation of a new bullish structure and a potential test of the levels around 30000. Therefore, my stop is at 26630, just above the needle.