In the recent downtrend, each retest of the descending trendline has shown a slight weakening in bearish momentum. Currently, the price is approaching a key daily support at 105,500.
Since Bitcoin has already broken previous support levels and dropped to this point, a test of this final support zone seems likely. Therefore, once the price reaches the trendline, I will monitor its reaction on lower timeframes. If bearish continuation is confirmed, I will be expecting roughly a 3% downside move.
For opening a position after Bitcoin reaches this area, I will also check Bitcoin dominance to decide whether to short Bitcoin directly or look for setups in altcoins.
If BTC dominance rises, I will focus on short opportunities in altcoins.
The next important reactions will be around 106,500 and 105,500. As mentioned earlier, we are already seeing early signs of weakness in the current downtrend:
1. Each touch of the descending trendline shows reduced bearish momentum.
2. The bearish waves are getting smaller in size with each touch of the trendline.
Thus, in these final support areas where buyers may step in, the probability of a trend reversal is now higher than at any previous point in this downtrend.
