Bitcoin Breakout Mode Pattern at the EMA on Daily Chart - July 19, 2026

[00:00:00]What makes a breakout mode pattern at the exponential moving average such an interesting pattern? Stay with us and you will discover it.

[00:00:11][music] [music] Welcome to this week's Bitcoin price action analysis. My name is Joseep Capo and I am a trader and an alto for the Brooks trading course website. We are going to analyze using the Brooks price action methodology the weekly and daily charts of Bitcoin. The weekly chart has completed a two legs structure. After completing a price action structure, there is kind of market searching for what comes next in a trading range.

[00:00:53]Whenever we are in a trading range after the completion of a two legs structure, the most likely outcome is a two legs structure on the opposite side. And therefore, if we were in a trading range, we should expect two legs sideways to up. The bears, the bears, they want a trend resumption. What they see it's a bare breakout and now they want a bare continuation. They see this as a good low on one entry.

[00:01:28]After a strong bare breakout, they got good bare follow through.

[00:01:36]And what they want is a measured move down based upon this bull leg that will bring the price towards the $50,000 area. However, the truth is that this is a third leg down. Normally, price action traders are wary of trading of going in favor of a breakout when it's a third leg. More important, the bulls closed a bare uh breakout point gap.

[00:02:16]the gap that the price that the bears left after breaking down below this low and now the bulls by trading above it they are closing the gap. That means that any bull that have bought with a limit order below this low here was able to make money if they are scaling lower or able to break even. And that means that they may continue to do the same thing below these lows.

[00:02:48]And this is the reason where why we say that the downside potential is redust because bulls will buy again.

[00:03:04]Another factor to consider is that bulls break above the bare trend line of the lower highs. is per trend lines. The moving average is also a representation of a trend line and bulls break above it.

[00:03:20]It is true that bulls failed. However, the bare momentum was weakened significantly.

[00:03:28]Bears that sold low, they will be disappointed and they will look to sell higher instead of selling low.

[00:03:37]So in overall I believe that bears selling low they are or they have a lot of risk of be of selling at the bottom. The bulls view this as a nested double bottom.

[00:03:57]They see a double bottom with this low and this low and another micro double bottom here with this low and this low after the bull reversal bare breakout.

[00:04:13]This inside bar becomes a high one bull signal.

[00:04:18]Then there is a bare trend resumption.

[00:04:21]But there is another bull reversal bar that the next bar triggers above that bull bar which is a high too.

[00:04:32]However, bulls still need to control.

[00:04:36]They do not have a control now.

[00:04:41]They have short-term control uh at the open of this bull reversal bar.

[00:04:50]But if they truly want to have options of testing the high of the bare swing down of the major lower high, they need at least to close soon above this red line which is the highest close after the bare trend resumption.

[00:05:10]The highest open, sorry, after this trend resumption down. If they do not close here above that and there is a reversal down, this may be just a bare flag and more downside might be expected. This bull high to signal bar, it's not a high probability signal bar.

[00:05:37]However, there is potential for the market to go up to the major lower high and that's a great riskreward ratio. And if the probability is say 40% chances that the market will visit that highs that makes a positive trader equation to buy above the high to signal bar which I think is theoretically true that this is a positive trader equation trade.

[00:06:20]However, for the traders like myself that like high probability, they will just wait for buying above a bull bar closing near the high making like a pattern like bull reversal high too and follow through. That will increase the chance the market will go higher. That means that the risk will be higher as well. So whenever we have more risk, we have also more probability.

[00:06:54]If we want low risk, we should accept low probability. The daily chart shows a very interesting pattern and we are now going to visit the daily chart. But before make sure that you know that the Brooks trading course is available for every everyone that is the most comprehensive trading course out there and is low cost. Actually I have done a master's degree in financials markets.

[00:07:34]I have studied other trading methodologies and I have always paid significantly more money for those than what I have spent in the Brooks trading course. And nowadays all I use for finding trading opportunities is using the Brooks price action methodology. You can find the link in the description of this video, Brooks Trading Course website. If you decide to do the trading course, remember that anything you need to become a price action trader, a professional price action trader, any resource that you are looking for will be available for you. There is a huge community of price action traders of price action students that will help you through the forum that will answer you any question you have.

[00:08:35]not only the forum but also the community in Discord.

[00:08:41]But most answers can be found at the learn to trade tab where there is the how to trade manual and once you have bought the Brooks trading course you have you will have full access of the how to trade manual. Not only that, but you will al also find a road map and critical articles that will help you on a daily basis to become a professional price action trader. Now, let's go to the daily chart. This is the daily chart of Bitcoin. And what we are looking for on this chart is at a two leg up structure.

[00:09:32]There was a bull breakout surging from a double bottom here and the bulls were expecting another second leg up.

[00:09:45]The last week we have said that there was a double signal for this second leg transition. So whenever we think that the market is doing a structure like a two-leg structure, one leg pullback, two legs, we look for bull, sorry, we look for candlestick patterns that can give us the hint that we are going to transition into a second leg.

[00:10:17]The market printed a double bottom after the bull leg and a good follow- through bar after the bull reversal.

[00:10:29]More open. Moreover, there was an IO II pattern here and that triggered a theoretically bare signal bar and bears failed when the market went one tick above this outside bar, this bull outside bar.

[00:10:51]So, it was the failure of bears.

[00:10:55]Instead, the market failed that transition here. The truth is that bulls that they if they put a stop loss below the low of this micro double bottom which was a minor higher low.

[00:11:14]They would have never been stopped out.

[00:11:18]Actually, what probably happened is that this test down make that bears that sold below the bear signal, they exited their trade in break even and that's what made this bullbar bears giving up.

[00:11:40]However, now the market has printed several reversals and created a breakout mode pattern here. So, this is sideways price action for more than 10 bars and that puts the market in a 5050 situation.

[00:12:01]There is some hints of bullish pressure here. However, whenever we see that there is a tight trading range, we should be aware that the market tends to close the gaps tends to create failures for both breakout for all breakout traders both on the upside and the downside.

[00:12:24]However, it is good to realize that bulls were able to defend the control of their minor higher low while bears were not able to control that. By control, I mean that there was a bull closure above the highest bare minor swings.

[00:12:48]And that gives me the idea that so far bears are not controlling that bears are not selling as much as bulls are buying. That is not actually true. I know that or we know that for every buyer there is a seller.

[00:13:13]However, that might hint that bulls are more aggressive when they buy.

[00:13:21]And if bears at some point give up, this might create a bull breakout.

[00:13:31]More importantly, what we have discussed at the introduction, this breakout mode pattern sits at the exponential moving average.

[00:13:43]Whenever we see a tight trading range or a breakout mode pattern, but especially if the price action is tight at the exponential moving average, what we expect it is a move away from the moving average. Since a breakout mode pattern on a try trading range, it is a very balanced pattern where bulls and bears have near 50% chances of succeeding in a in a breakout on either side.

[00:14:14]That means that there can be a bull breakout or a bare breakout.

[00:14:20]But the most likely outcome is that there will search a swing from this pattern. The fact that the m that this trading range is following a bull breakout hints that the market is accepting higher prices and that the market will continue to discover higher. However, it is far from being a warranty and the chances are more balanced than what most analysts think. I think this kind of pattern uh tight trading range at the exponential moving average when the context is interesting. In this case, we are looking at the weekly chart and we see that we might be in an area where the market can just have a lot of potential for a bull starting or for a beer leg to resume a bare trend.

[00:15:23]But I think it's a good location for expecting a breakout here. a breakout that will deliver like a $10,000 move or a $15,000 move on either direction. The options market have interesting possibilities for placing a trade whenever you are not sure on the breakout direction. So you can play a long a straddle which means buying an at the money put and buying an at the money call. And if there is a strong breakout, you have a the a limited risk on one side, the side that will fail, but you have an a a theorical unlimit potential for the side that works the breakout.

[00:16:19]the enemy.

[00:16:20]There is always a trade-off is that the more the market spends sideways before the breakout, the more value will lose your option.

[00:16:44]You don't have to trade options. You can just wait for a breakout plus follow through of the high in the case of a bull breakout or the low of the trading range. If there is a bare breakout, you wait for a for a breakout plus follow through.

[00:17:06]Or you wait for a failed breakout plus follow through.

[00:17:12]to bet that the swing will fail and the price will initiate the move on the opposite direction. Most important is that I would not buy low and sell high within this tight trading range because I know that the risk of a breakout is high. So I think that the best thing you can do here is either being patient and wait for successful or failed breakout or play the options market strategy.

[00:17:48]And this is all I have for you today. I hope you enjoyed the video and if you have any questions, please leave it at the comment section where I will be very happy to answer.

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