Bitcoin analysis for today

January 08, 2025 at 11:05AM
Bitcoin Futures Technical Analysis – January 8, 2025

Financial Instrument: Bitcoin FuturesPrice 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.

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