G’day everybody, Craig Cobb from the Grow Me Co.
Bitcoin remains stuck in consolidation, but the broader crypto market is starting to show some interesting signs underneath it. The level I continue to watch is $82,811. Bitcoin breaking through there wouldn’t technically establish a monthly uptrend, but it would end the existing monthly downtrend, and that would be a meaningful step toward bringing more bullishness back into the market.
Meanwhile, the total crypto market cap has already broken the level it needed to break, and the altcoin market is actually leading Bitcoin with a higher low and higher high on the monthly chart.
This week I also want to show you how I approach a potential trade when the higher-time-frame structure looks good, but the exact entry I’m looking for hasn’t appeared yet.
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Bitcoin Is Still Consolidating
Starting with the four-hour Bitcoin chart, there’s not much to work with.
It’s messy.
We’ve had some upside, but there’s no clean trend or cyclicity. The one-hour chart does show a higher low and higher high, but I don’t care much about those lower time frames until I’ve established the structure I want on the four-hour chart.
Zoom out to the daily and the consolidation becomes even clearer.
For the bulls, I want two things.
First, the current structure needs to hold as a higher low.
Second, Bitcoin needs to push higher and establish a higher high.
That would put Bitcoin into a daily uptrend.
But the more important level remains the monthly structure. As I discussed in Tuesday’s newsletter, the high I’m watching is $82,811.
A break above $82,811 wouldn’t technically put Bitcoin into a monthly uptrend. That’s an important distinction. What it would do is remove the existing monthly downtrend created by the lower high and lower low.
That’s significant.
And it ties back into the three-month chart I’ve been discussing for quite some time.
The three-month structure has historically been extremely cyclical. According to the pattern I’ve been tracking, a break of the relevant high has preceded the next bull market 11 out of 11 times.
We’ve pulled back again, we’ve got a bullish candle, and there are 21 days remaining in the current three-month candle.
So I’m watching $82,811 closely.
Get through there and the monthly downtrend is gone. That doesn’t automatically mean Bitcoin goes straight into a bull market, but it puts another important piece of structure back on the bullish side.
Altcoins Are Already Leading
The broader market is actually ahead of Bitcoin.
The total crypto market cap needed to break approximately $2.72 trillion. It reached roughly $2.73 trillion.
It only got through by a tiny amount, but it got through.
That’s enough to end the downtrend in total market capitalization.
What’s more interesting is the altcoin market.
Altcoins have already established a higher low and higher high on the monthly chart.
So right now, altcoins are showing stronger monthly structure than both Bitcoin and the total crypto market.
That’s worth paying attention to because Bitcoin doesn’t always have to be the first part of the market to move. At the moment, the altcoin market is leading the way.
How I Build a Trade When the Perfect Entry Isn’t There
Now let’s get into the trading methodology.
I’m not showing these charts as trade recommendations. I’m using them to demonstrate how I think through structure and how I build probabilities before entering a position.
I’ve spent more than 20 years trading primarily around two approaches:
Breakouts and cyclical trend-following setups.
Jupiter is a useful example of the second approach.
The structure has been clean: higher low, higher high, another clean pullback and good MACD convergence. That’s the type of cyclicity I’m looking for.
But what happens when you’ve got a market with a nice trend and good cyclicity, yet you don’t get the exact higher-time-frame entry you’re waiting for?
That’s where I’ll start moving down through the time frames.
WLD is a good example.
On the four-hour chart, the cyclicity is very clean. We’ve got the trend and we’ve got the pullback.
Maybe I eventually get the four-hour trade sitting exactly where I want it. If that happens, great.
But while I’m waiting, I’ll also move down to something like the 30-minute chart and start looking for a potential breakout structure.
And my breakout rules are specific.
I want a horizontal level.
I want at least three touches of that level.
And ideally, I want to see higher lows building underneath resistance.
I don’t use sloping trend lines because I consider them too subjective. Horizontal levels give me something much cleaner to work with.
On WLD, I currently have two tests of the resistance level and a higher low underneath it.
That’s not enough for me yet.
I need that third touch.
If it develops, I’ve now got a lower-time-frame breakout setup potentially aligning with a clean higher-time-frame trend.
That’s where the probabilities begin stacking in my favor.
The point isn’t to find a reason to take a trade.
It’s the opposite.
Start with the higher-time-frame trend and cyclicity. Then look for the structure. Then look for the entry. If the exact setup doesn’t exist, don’t force it. Move through the time frames methodically and see whether another valid setup develops.
For WLD, I’m waiting to see whether I get the four-hour cradle or a valid lower-time-frame breakout.
Either way, the criteria have to be there.
For Bitcoin, the criteria are equally clear.
$82,811.
Get through $83,000 and Bitcoin’s monthly downtrend is over. The total market cap has already done its job, and altcoins are currently leading.
Now we wait to see whether Bitcoin follows.
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