This week's core question: Bitcoin's daily structure has weakened, and will the short-term rebound effectively break through the upper rail of the descending channel? Has HYPE's seven-wave advance reached its end? We systematically examine current market structure from multiple timeframes and outline medium- and short-term trading strategies. Last week's article pointed out Bitcoin's continued oscillating downtrend and advocated a "short on rallies" approach — a view validated by recent price action. Below, we delve deeper into BTC's loss of the mid-line of its rising channel, HYPE's top signal coinciding with momentum divergence, and concrete entry/exit plans based on our proprietary price-difference trading and momentum quantification models.
I. Bitcoin Multi-Timeframe Channel Analysis: Weak Rebound Fails to Conceal Correction Trend
Since its low on February 6, 2026, Bitcoin has oscillated within a rising channel (yellow). The lower rail connects the lows of February 6 and March 29, while the upper rail is drawn parallel through the March 17 high. However, the price has lost the channel's mid-line and is now seeking stronger support at the lower rail. Simultaneously, after peaking at $82,850 on May 6, BTC entered a short-term descending channel (blue) defined by the May 14 and May 26 reaction highs (upper rail) and the May 7 and May 23 correction lows (lower rail). Currently, the price found temporary support at the descending channel's lower rail (~$72,500) and is undergoing a weak rebound toward the upper rail.
Overall assessment: Bitcoin is under the dual influence of long- and short-term channel structures. The current rebound is mainly a repair of short-term oversold conditions, targeting the upper rail of the descending channel. However, because the price has already broken below the mid-line of the rising channel, the overall technical structure has weakened. After the rebound concludes, the price is likely to resume the prior downtrend and further test the support strength of the rising channel's lower rail.
II. Bitcoin 4-Hour Structure: A 10-Segment Correction with Two Central Hubs
On the 4-hour timeframe, the correction from the May 6 high at $82,850 can be subdivided into ten segments — from "27-28" to "36-37" — containing two descending central hubs. Hub D is formed by the overlapping segments 28-29, 29-30, and 30-31; Hub E by 32-33, 33-34, and 34-35. The market is now in segment 36-37 (rebound). Should the rebound stall and fail to break through the $75,000–$76,000 zone, a continuation of the oscillating downtrend is likely, with a test of support at $69,500–$70,500.
Key resistance: first resistance zone at $75,000–$76,000 (near the lower boundary of Hub E); second resistance zone at $78,500–$79,500 (around both hubs' boundaries). Key support: first support at $69,500–$70,500 (prior significant support); second support near $65,000 (prior significant support).
III. Bitcoin Short-Term Strategy and A/B Trade Plans
Short-term operations use 30% of the position, with strict stop-losses, aiming for range trades around support and resistance (30-min/60-min cycles). To dynamically respond to complex market conditions, two concrete plans are prepared in advance:
Plan A (short on resistance): When the price rebounds into the $75,000–$76,000 zone and encounters resistance, accompanied by a top signal from the quantitative model, establish a short position of 30% or less. Initial stop-loss placed above $77,000. Gradually close the position when the price approaches key support and the model issues a bottom signal.
Plan B (short on breakdown): If the price effectively breaks below the $69,500–$70,500 support area and the model confirms a top signal, establish a short position of 30% or less. Initial stop-loss placed above $72,000. Gradually take profits as the price declines to significant support and the model signals a bottom.
IV. HYPE 4-Hour Seven-Wave Structure: Top Signal and Momentum Divergence
On the 4-hour chart, HYPE has constructed a clear seven-wave structure (segments 40-41 through 46-47) containing an ascending central hub since its low of $38.14 on May 14. Segments 43-44, 44-45, and 45-46 overlap to form that hub. Previous weekly commentary warned that point 45 exhibited momentum top divergence together with a top warning from the price-difference trading model, making a short-term high probable. The market confirmed this: price corrected from $64.75 to $56.30, a maximum decline of 13.05%. At present, the central hub's exit wave (46-47) shows weakening momentum compared to the entry wave (42-43), indicating a high probability of a potential momentum divergence. Our proprietary model has triggered a strong top warning signal at point 47 (red dot + white dot).
This week's core HYPE view: observe whether the top signal at point 47 is confirmed by momentum divergence. If this occurs and the price subsequently breaks below the $62.5–$64.57 support area, point 47 can be regarded as the terminus of the uptrend that began from the May 14 low.
V. HYPE Short-Term Strategy: Buy Dips, Avoid Chasing Rallies
HYPE short-term trading should adhere to the principle of "buying on dips and avoiding chasing rallies." The key is to watch how price reacts to the $62.5–$64.75 zone. If the price pulls back to this area and shows signs of stabilization, accompanied by bottom signals from both models, a small long position can be attempted with a position size below 30%, strictly respecting stop-losses. If the price effectively breaks below this zone, the short-term correction will escalate to a larger degree (e.g., daily) with extended duration and depth, the next downside target being the $54–$56.3 area.
VI. Last Week’s Trade Review: Short Position Gains 5.07%
Strictly following the plan, we executed one short trade last week based on proprietary model signals. Entry conditions: price found resistance near $78,000, forming a "top fractal" bearish candlestick pattern; the price-difference model triggered a top warning (white dot); the momentum model confirmed a top divergence. We entered a 30% short position at $77,449. Exit conditions: price reached near $73,000 and showed signs of stabilization, forming a "bottom fractal"; the price-difference model issued a strong bottom warning (red dot + white dot) that resonated with a bottom signal from the momentum model. We closed the entire position near $73,519, locking in a profit of about 5.07%.
VII. Dynamic Risk Management Rules
Set an initial stop-loss immediately upon entry. When profit reaches 1%, move the stop-loss to the entry price (breakeven) to protect capital. At 2% profit, move the stop-loss to the 1% profit level. Continuously trail the stop-loss: for every additional 1% gain, move the stop-loss another 1% higher, dynamically locking in profits.
Disclaimer: Financial markets are highly dynamic. All analysis, models, and trading strategies presented here are based solely on personal technical analysis and serve as a personal trading journal. They do not constitute investment advice or a basis for decision-making. Markets involve risk; invest with caution and do not rely on this article for trading decisions.