BTC’s Neckline Break: Sell the Bounce to 116k, Target 113k as S3 Holds Before Next Leg

Executive summary

• Market context (24h outlook): BTC suffered a sharp intraday breakdown, falling from ~121.7k to a session low near 114.0k on elevated volume. Price is now hovering ~114.5k, just above a major confluence of supports (classical S3 pivot ~113.9k, 61.8% retracement cluster nearby, prior daily congestion 112.7–114.4k). The move likely creates a reflex bounce window toward 115.6–116.8k, but the broader short-term structure turned bearish (neckline break, momentum rollover, MA slips). My base case for the next 24 hours: a dead-cat bounce into resistance followed by a fade toward 113.0–112.7k. Strategy: Sell into strength with tight risk controls.

Multi-timeframe trend assessment

• Higher timeframe (daily):
  • Trend was up from late September (109k) to early October (126.2k). A topping pattern formed with a right shoulder around 123.7–125.6k. Today’s candle is a large bearish range that engulfs multiple prior days, breaking the neckline zone (~121.0–121.5k). That turns the short-term daily trend from bullish to neutral/bearish.
  • Current daily candle: O 121,727; H 122,499; L 114,047; last 114,545. This is an outsized bearish day with a close well below the 20-session mean and below the neckline.
• Intraday (hourly):
  • Sideways-to-soft bid through the early UTC session, then a cascade began 15:00–20:00 UTC with large red candles and volume spikes. The 20:00 bar printed the capitulation spike to 114,047. Hourly structure is decisively bearish (lower lows/lower highs). A reflexive bounce attempt is likely but should face supply at 115.6–116.8k and 117.6k.

Price action and structure

• Head-and-Shoulders (H&S) / Double-top nuance:
  • Left shoulder ~Oct 3 (123.9k), head ~Oct 6 (126.2k), right shoulder ~Oct 8–9 (123.7–124.2k). Neckline ~121–121.3k.
  • Measured move: 126.2k - 121.0k ≈ 5.2k → Target ≈ 115.8–116.0k. Price overshot to 114.0k, common in fast markets (stop run/ liquidity vacuum) before stabilizing.
• Market structure breaks:
  • Lost key swing supports: 120.7k, 119.9k, 118.7k, and the neckline 121.xk. Each may now act as resistance on bounces.
• Support/resistance ladder:
  • Supports: 114.0–114.6k (intraday low zone), 113.9k (S3 pivot), 112.7–113.3k (78.6% fib + Aug/Sep shelf), 111.2–112.1k (late-Aug consolidation), 109.0–109.7k (major late-Sep base).
  • Resistances: 115.6k (61.8% retrace confluence), 116.3–116.8k (intraday supply/MA cluster), 117.6k (50% retrace), 118.7–119.6k (prior shelf), 121–121.5k (broken neckline), 122.4–123.7k (shoulder/swing highs).

Volatility and volume diagnostics

• Daily range today ~8.5k, materially above recent ATR, signaling a volatility regime shift. Spikes at 19:00–20:00 UTC point to capitulation and possible short-term mean reversion.
• Expect mean-reverting behavior in the next several hours, but supply overhead likely caps the bounce.

Moving averages (approximate)

• 20-day SMA ≈ 116.8k (computed from the last 20 daily closes). Price at 114.5k is now below this mean ⇒ short-term bearish tilt.
• 50-day SMA (approx) sits near mid-116s to 117k based on the last 50-session corridor; price is near/below it, marking a momentum loss. A decisive reclaim >117k would be first sign of stabilization.
• 1h EMAs (8/21) are bearishly aligned; intraday rallies likely stall into the 21-EMA zone (roughly mid-116s) on first test.

Momentum oscillators

• RSI (daily): Likely fell from the 60s into the mid-40s/low-40s on today’s break—neutral-bearish but not yet deeply oversold on daily. Room for further downside after bounces.
• RSI (1h): Reached oversold on the flush; bullish divergence risk if price makes a marginal LL with a higher RSI trough—supports a near-term bounce before next leg.
• Stochastics (1h): Oversold and curling—signals reflexive bounce window.

MACD

• Daily MACD: Histogram likely rolling over toward zero/negative after topping earlier this week; a bearish cross is probable if follow-through selling persists. Momentum turning down.
• 1h MACD: Deeply negative on the flush; expect a short-lived positive inflection on a bounce, but the dominant signal remains bearish below 117–118k.

Bands and channels

• Bollinger Bands (daily): Price pierced or sits at/under the lower band—mean reversion tendency favors a bounce toward the 20-DMA band midline later, but first resistance is just above 116k.
• Keltner Channels: Expansion break to the downside; initial snapback often tests the channel boundary from below ≈ mid-116s.
• Linear Regression channel (late Sep → early Oct up-leg): Price broke below the midline and tagged the lower boundary area (~114–115k), consistent with an initial overshoot and potential reversion to midline (~118k) if the bounce gains traction. That said, the broken neckline should curb rallies earlier.

Ichimoku (contextual, approximate)

• Daily: Price likely dipped below Tenkan and Kijun; still possibly above the cloud base if the cloud sits near low-112s. Below Tenkan/Kijun suggests short-term bearish. A bounce to Kijun (~118–119k) would be a selling zone unless reclaimed decisively.
• 1h: Price well below the cloud. Any bounce into the underside of the cloud (~116–118k) likely finds sellers initially.

Fibonacci mapping

• From Sep 25 swing low (109,049) to Oct 6 high (126,198):
  • 38.2% = ~119,643 (now resistance)
  • 50% = ~117,624 (resistance)
  • 61.8% = ~115,603 (resistance/near-term magnet)
  • 78.6% = ~112,725 (major support target if selling resumes)
• Current price (114.5k) sits between 61.8% and 78.6% retracements; a common bounce zone followed by another leg lower toward 112.7k if sellers resume.

Classical pivots (using Oct 9 H/L/C ~123,739/119,812/121,706)

• P ≈ 121,752; S1 ≈ 119,765; S2 ≈ 117,825; S3 ≈ 113,898; R1 ≈ 123,692; R2 ≈ 125,679.
• Today’s low (114,047) is near S3 (113,898) → S3 often halts first impulse; a bounce to S2/S1 areas is typical before trend decision. This aligns with a 115.6–116.8k test window.

Volume/flow and OBV

• OBV trend likely cracked with today’s break, reinforcing the bear tilt. Distribution near 121–123k followed by a vacuum selloff suggests supply trapped overhead.

Elliott Wave lens (heuristic)

• Working hypothesis: Wave A down from 126.2k may have printed near 114k. Anticipate a B-wave bounce to ~116.5–118k, then C-wave extension toward 112.7–111.5k. This sequencing fits confluence and timing into the next 24–48h.

Hourly microstructure and likely path (next 24h)

• 0–6h: Reflex bounce attempt from 114.0–114.6k toward 115.6–116.3k; possibly stretching to 116.8–117.6k if short covering accelerates.
• 6–18h: Sellers reload at resistance; watch for lower high patterns on 15–60m. Failure below 116.8k favors drift back under 115k.
• 18–24h: Retest 114k; if broken on rising volume, slide into 113.3–112.7k. Expect responsive buyers near 112.7k on first test.

Scenario probabilities (subjective)

• Base case (55%): Bounce to 116.3–116.8k, then fade toward 113.0–112.7k.
• Bear extension (25%): Weak bounce → immediate breakdown under 114k → 112.7k and possibly 111.8–111.2k if liquidity thins.
• Bull recovery (20%): Strong reclaim >117.6k and hold → squeeze toward 118.7–119.6k; above 121k invalidates near-term bear thesis.

Risk management and trade construction

• Short setup (preferred):
  • Entry (limit sell): 116,300 (confluence: 1h supply zone, underside of MAs, near 61.8%/Keltner/BB midline proximity).
  • Stop (guideline): 117,800 (above 50% fib 117,624 and 1h breakdown pivot 117,744), risk ≈ 1,500.
  • Target: 113,000 (just above 112.7k 78.6% fib), reward ≈ 3,300; R:R ≈ 2.2.
  • Alternate continuation trigger if no bounce: Add-on/second plan would be a break-sell below 114,000 toward 112,800, but primary plan is to sell the bounce.
• Long countertrend (not preferred for plan): A scalp buy from 114.3–114.6k to 116.0–116.8k exists, but adverse risk includes a flush to 112.7k; not favored vs. the dominant structure.

Invalidation and what would change my mind

• A sustained reclaim and hold above 118.0–118.7k on rising volume would neutralize the immediate bear view and open 120.5–121.5k retest. Above 121.5k turns the bias back to bullish near term.

Key takeaways

• The break of the 121k neckline with outsized range and volume flips near-term control to sellers.
• First touch of S3/panic low often yields a bounce; use that to enter shorts into strength.
• 112.7k (78.6% fib) is the magnet if the bounce fails under 117k.

24-hour price prediction (path)

• Likely path: 114.5k → 116.3–116.8k bounce → 113.0–112.7k retest by end of window, provided 117.8k is not reclaimed.