BTCUSD – Go Short or Go Broke | H4 Setup

Oct 2

📝Thesis: Just entered a short on BTCUSD based on a confluence of technical and macro signals. This isn’t just about overbought RSI - it’s about asymmetric risk, deceptive bullish structure, and a broader bearish undertone most traders are ignoring.

📉 Setup Breakdown
RSI (H4): 85.12 – Extremely Overbought. Historically, this zone has triggered sharp pullbacks. Previous RSI peaks marked “Bear” on chart confirm the pattern(July, August 2025).

📊 Chart Structure: Rising wedge approaching STR resistance zone + 78.6 fib level. Price action looks exhausted, and volume is fading.

🌐 Macro Bias: Despite local bullish momentum, the broader trend remains bearish. Credit spreads are widening, and macro liquidity is tightening. Risk-off tone is creeping in.

⚖️ RR Profile: ATH is just ~$4K above. Downside targets offer cleaner reward zones with tighter invalidation. Stop placed just above STR zone.

🎯 Trade Parameters
✅ Entry: Near STR resistance zone
⛔️ Stop: Above upper trend line / STR zone
🟠 Target 1: Mid-channel support
🟢 Target 2: Lower fib confluence zone

🧠 Macro Overlay

• U.S. credit spreads are widening (HY index at 2.75%, CDS spreads rising).
  
• Government shutdown risk is escalating.
  
• Fed is in risk-management mode - not panic yet, but tone is shifting.
  
• October is historically volatile (see 2008 analogs) - watch for liquidity stress.
  

⚠️ TL;DR
Shorting BTCUSD here isn’t just technical - it’s strategic. Overbought RSI + bearish wedge + macro stress = asymmetric setup.
Risk is capped, reward is clean. Let’s see how it plays out.

Oct 3

Trade active

Resistance Zone strongly rejected - watching to see where the candle closes tonight, will be a very significant confirmation of the bear market narrative or its invalidation.

Oct 4

Note

Thesis delayed, not denied. Price action has stretched the timing window, but the macro-bearish structure remains intact. To resolidify the thesis, we need a daily close below $119K - that’s the line in the sand.

🟠 Above $119K: reflexive strength, tactical patience, and volatility recalibration
🟢 Below $119K: thesis revalidated, distribution bias confirmed, downside targets reopened

Until then, we hold narrative tension. The setup is still live-just waiting for price to cooperate.

Oct 5

Trade closed manually

Setup Invalidated: Resistance Zone Breached

Rejection did not hold - price broke through the resistance zone, invalidating the short thesis.

Appreciate all the comments and feedback - always valuable in refining the lens. For now, I'm expecting sidelined movement and observing reflexive momentum. Will reassess once structure reasserts itself or signs of exhaustion emerge.

Else, the bullish rally continues. Momentum favors continuation until proven otherwise. Watching for signs of overextension or divergence, but respecting strength until the tape says otherwise.

Oct 5

Note

Update: Inflection Point in Play

While the breakout invalidated the setup on H4, it’s not yet confirmed on D1, so this could still be a fakeout - recent move might just be intra-day noise.

Watching the daily close relative to August highs (Resistance Zone). This level remains pivotal:

📉 Daily close below → High probability of trend reversal. Momentum likely fades, opening path toward base support and deeper retracement.

📈 Daily close above → High probability of bullish continuation. Structure confirms breakout, with potential for reflexive extension if volume and ETF flows align.

No bias - just levels. Let the candle speak.

Oct 5

Note

Negative divergence spotted on H4 near the resistance zone, flagging elevated risk of earlier breakout being a bullish fakeout. Price is printing new highs, yet momentum is diverging - classic signs of exhaustion. Also, volume profile suggests distribution, not breakout conviction.

Next 24–48 hours are pivotal, fingers crossed.

Oct 6

Note

Update:

Daily candle hasn’t closed yet, but it’s currently holding strong above the resistance zone... looking like a potential confirmed breakout if this momentum sustains into close. Short setup is off the table for now, and bias leans bullish with the next target around 130k, aligning with the Fib 1.272 extension.

That said, I’m keeping it cautious. We’re still in a blackout phase - no fresh U.S. data, government shutdown risk, and limited Fed guidance - so this move could still get tricky if liquidity fades.

For now, watching closely to see if the daily close seals the breakout or pulls back into structure.

This thread is now officially closed, thanks to everyone for the comments, feedback, and debates. Great insights from sharp minds - really appreciate it all.

Oct 11

Note

In retrospect, though delayed, this was a bold and a great call...