Technical Analysis

Today’s Bitcoin Futures Analysis

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TradeCompass for Bitcoin Futures Analysis – January 22, 2025

Current Price of Bitcoin Futures: 106,200

Key Thresholds Within Today’s Bitcoin Futures Analysis

  • Bullish above 106,840
  • Bearish below 105,450

Bitcoin Bullish Scenario

Why 106,840?Crossing 106,840 signals bullish momentum in Bitcoin futures because:

  1. The price moves above yesterday’s Value Area High (VAH).
  2. It surpasses the VAH from two days ago.
  3. It breaks above the third standard deviation of today’s VWAP.

Currently, today’s VWAP is trading in a horizontal direction, suggesting a neutral bias. A break above this key level could trigger increased buying activity, solidifying the bullish case for Bitcoin futures.

Bitcoin Bullish Targets:

  1. 108,460 – Just below the second upper standard deviation of yesterday’s VWAP.
  2. 110,300 – Near the third upper standard deviation of yesterday’s VWAP.

Bitcoin Bearish Scenario

Why 105,450?If Bitcoin futures drop below 105,450, this would confirm bearish momentum because:

  1. The price would fall beneath a critical support level.
  2. It would also drop significantly below the VWAP midpoint of today.

Bitcoin Bearish Targets:

  1. 104,835 – Just above yesterday’s VWAP.
  2. 103,825 – Near the POC (Point of Control) of yesterday.
  3. 102,960 – Based on deeper volume profile support.
  4. 101,950 – Close to yesterday’s Value Area Low (VAL).

VWAP Reference for Bitcoin Futures

  • Current VWAP of Bitcoin Futures: 106,130 (as of now)This level currently sits between the bullish and bearish thresholds, acting as a mid-range guide for stop placement or trading strategies.

Risk Management for Bitcoin Futures Trading

  • Stop Placement:

    • If you go long above 106,840, your stop should not be below 105,450 (bearish threshold).
    • If you go short below 105,450, your stop should not exceed 106,840 (bullish threshold).

  • Partial Profit Targets for Bitcoin Futures:

    • Use the provided targets to scale out of positions and lock in profits along the way. Most price movements in Bitcoin futures occur incrementally rather than in large breakout moves, making partial profit-taking a critical component of risk management and maximizing returns.

Educational Insight: Bitcoin Futures Analysis Essentials

  1. Volume Profile and Value Area in Bitcoin Futures Trading:

    • Volume Profile: Identifies price levels with the highest traded volume, providing insight into key areas of interest.
    • Value Area (VA): Represents the price range where 70% of trading activity occurs. Key levels include:
      • Value Area High (VAH): The upper boundary, often acting as resistance.
      • Value Area Low (VAL): The lower boundary, frequently serving as support.

  2. VWAP and Standard Deviations in Bitcoin Futures:

    • VWAP (Volume-Weighted Average Price): Tracks the average price weighted by volume, recalculating dynamically throughout the trading session. It is a cornerstone for identifying intraday support and resistance.
    • Standard Deviations Around VWAP:
      • 1st Deviation: A common area for support/resistance.
      • 2nd and 3rd Deviations: Zones for potential overbought or oversold conditions, often signaling reversals.

  3. POC (Point of Control) in Bitcoin Futures:

    • The POC is the price level with the highest traded volume for the day. It frequently acts as a magnet for price, pulling the market toward this zone before significant moves.

  4. Partial Profit-Taking in Bitcoin Futures:

    • Partial profit-taking allows traders to manage risk effectively, capitalizing on smaller, high-probability moves. This is particularly important in Bitcoin futures trading, where institutional activity often drives the market toward key levels before reversing.

Why Use the TradeCompass for Bitcoin Futures?

  1. Eliminates Bias in Bitcoin Futures Trading:TradeCompass keeps you open to both bullish and bearish scenarios, helping you avoid emotional decisions that can lead to poor trades.

  2. Precision in Bitcoin Futures Analysis:It offers clear entry and exit points based on institutional trading levels, allowing traders to align their strategies with professional market participants.

  3. Enhanced Risk Management:TradeCompass identifies partial profit targets based on significant price levels where institutional traders are likely to take action.

Trade Bitcoin futures responsibly. Use the TradeCompass to stay on track, minimize emotional decision-making, and capture profits in a systematic way. Always trade at your own risk.

This article was written by Itai Levitan at www.forexlive.com. Source