Introduction
The cryptocurrency market is holding its breath as Bitcoin (BTC/USDT) approaches a make-or-break moment at the $106,780-$106,130 Potential Reversal Zone (PRZ). This level represents a perfect storm of technical factors that could trigger either:
- A significant pullback to $103,000 (ideal short opportunity)
- A bullish breakout toward $110,000+
In this comprehensive 2500-word guide, we’ll analyze:
✅ 5 chart patterns converging at the PRZ (with annotated examples)
✅ Elliott Wave count showing why Wave Y may be complete
✅ Liquidation heatmaps revealing where stops cluster
✅ 3 professional trade plans for different scenarios
✅ Exclusive video breakdowns of key concepts
“The market is giving us one of the clearest technical setups we’ve seen in months. This is how smart money prepares for these opportunities.”
1. The Anatomy of Bitcoin’s PRZ Setup
1.1 What Makes This Zone Special?
The $106,780-$106,130 zone combines 4 proven reversal signals:
- Fibonacci Confluence
- 0.786 retracement of last swing high
- 1.272 extension of corrective wave
- Harmonic Pattern Completion
- Perfect Bearish Gartley pattern (see Chart 1 below)
- AB=CD measured move target hit
- Institutional Order Blocks
- Coinbase Pro order book shows $28M in sell orders
- CME futures open interest peaks at $106,500
- Psychological Round Number
- $107,000 is key mental resistance
- Chart 1: BTC 4H Gartley Pattern (Click to enlarge)
2. Elliott Wave Theory: The Final Countdown
2.1 The WXY Correction Explained
Bitcoin appears to have completed a complex WXY corrective structure:
- Wave W: Initial drop to $98,400
- Wave X: Rally to $104,200
- Wave Y: Final push to current PRZ
This pattern suggests:
- Exhaustion of buying pressure
- High probability of ABC pullback
📺 Video Lesson: “Mastering Elliott Wave Corrections”
https://via.placeholder.com/800×450?text=BTC+Elliott+Wave+Analysis
Chart 2: WXY Count on Daily Timeframe
3. Liquidation Heatmap: The Hidden Catalyst
3.1 Where the Stops Are Hidden
Liquidation data reveals critical zones:
| Price Range | Liquidation Impact |
|---|---|
| $107,568-$106,601 | $45M in short liquidations |
| $105,360-$104,784 | $120M long liquidations |
| $103,937-$103,217 | “Black hole” liquidation cluster |
Key Insight: A break below $105,360 could trigger a domino effect of long liquidations.
Chart 3: CoinGlass Liquidation Map
4. Professional Trade Plan (3 Scenarios)
Scenario 1: PRZ Rejection (70% Probability)
Entry:
- Ideal: $106,500 (mid-PRZ)
- Aggressive: $106,800
Stop Loss:
- $107,650 (above weekly high)
Targets:
- $105,055 (CME Gap)
- $104,380 (Support)
- $103,060 (Liquidation cascade)
Risk Management:
- 1:3 Risk-Reward ratio
- Position size: 2% portfolio risk
Scenario 2: Bullish Breakout (20%)
Confirmation Needed:
- Daily close above $107,620
- Volume > $3B on breakout
Potential Targets:
- $110,000 (Psychological)
- $112,400 (1.618 extension)
Strategy:
- Wait for the retest of $107,600 as support
- Use options for defined risk
Scenario 3: Fakeout & Reversal (10%)
How to Spot:
- Spike to $107,200, then rapid rejection
- Lower high on RSI
Trade Execution:
- Short on break below $106,000
- Target $104,000
5. Historical Precedents: Learning From the Past
Case Study 1: 2021 Top Formation
- Similar PRZ at $64,800
- Resulted in 28% correction
- Identical RSI divergence
Case Study 2: 2019 Mid-Cycle Rejection
- WXY completion at $13,800
- 31% subsequent drop
Chart 4: Bitcoin Right Now
6. Risk Management: The Professional Edge
6.1 Position Sizing Formula
Position Size = (Account Risk %) / (Stop Loss Distance) Example: ($10,000 × 1%) / ($107,620 - $106,500) = 0.89 BTC
6.2 Advanced Stop Techniques
- Volatility Stop: 2.5x ATR(14)
- Time Stop: Exit if no momentum in 48h
📺 Video Guide: “Advanced Crypto Stop Strategies”
7. Alternative Strategies
7.1 Options Plays
- Put Spread: Buy $104,000 / Sell $102,000 puts
- Strangle: Play both breakout and breakdown
7.2 Spot Accumulation Zones
- $104,000-$103,000 for long-term holders
- DCA every 2% drop
FAQ Section
Q1: Why not short immediately at PRZ?
A: Always wait for confirmation (close below $106,000) to avoid fakeouts.
Q2: Best indicator combo for this setup?
A: RSI + MACD + Volume Profile (see Chart 5 below)
*Chart 5: Multi-Indicator Confirmation*
Q3: How long might a pullback last?
A: Typically 2-3 weeks for corrections at this stage.
Q4: Where to track institutional activity?
A: Glassnode for on-chain, Skew for derivatives.
Conclusion: Your Action Plan
- Watch the PRZ closely ($106,780-$106,130)
- Wait for confirmation before entering
- Execute with discipline using our risk framework
Call to Action:
“Found this analysis helpful? Like 👍 and share to help other traders spot this critical setup!”
Leave A Comment