Bitcoin experienced a 4% decline, erasing gains made the previous day, suggesting a possible outside day reversal. Bulls took profits after failing to break the highs from May and June, indicating potential lower highs on the chart.

Despite this, there are some higher lows this month, suggesting that the trend is not definitively bearish yet. Concerns over the US potentially engaging in the Iran-Israel conflict have also led to a broader slip in the risk trade.

This initial price action—a clear 4% drop wiping out prior gains—points to a classic outside day reversal pattern, often suggesting indecision or a turning point in near-term sentiment. It tells us that, although buyers were active at first, they ultimately stepped back as the session continued, handing control back to sellers by the end of the day. When we look at behaviour typical of profit-taking, especially following a failed break through previous highs from spring, the outcome becomes more understandable. With those earlier price peaks now acting like stubborn overhead resistance, the psychological barrier for a sustained move higher seems to have stiffened.

Importantly, the idea of a lower high emerging on the chart carries weight. It acts as visual feedback that momentum could be draining from current bullish efforts. But at the same time, the appearance of higher lows over recent sessions clouds any easy downward bias. The result? A tug-of-war, where neither side can comfortably claim dominance.

Then there is the macro setting. Geopolitical jitters always have a way of bleeding into market behaviour. News cycles hinting at new entanglements between the US, Iran, and Israel have encouraged traders to step back from anything volatile or sensitive to headlines. Risk assets, often the first to retreat when uncertainty rises, have not been spared. In moments like these, even assets moving on very different fundamentals tend to correlate, if only temporarily.

From our vantage point, what this means for short-term positions is fairly actionable. Charts are messy, but not broken. Still, the reward for guessing the next breakout appears slimmer than the penalty for being caught in a false one. Volatility remains both an opportunity and a hazard, particularly when options pricing doesn’t yet fully reflect incoming swings in global tension.

We’re watching whether further higher lows print over the next few sessions. Should that formation hold, it may offer the kind of structure that encourages directional bets again—but timing would matter more than usual. Reclaiming recent resistance from May would alter the mood firmly. Without that, however, calls placed too early could decay quickly, especially if premiums rise on wariness rather than movement.

Larger players seem to be staying close to delta neutral, and with open interest still high, the risk of sharp moves on low liquidity days rises. Spot pressure filtering into futures markets also suggests crowd hesitation, meaning fewer willing to commit at size. That lack of commitment often breeds choppy price action, with quick reversals rather than continuation.

For now, patience is likely to pay well. Scalps must be placed with intent and managed closely. Edges exist, but they’re faint. Let others chase confirmation bias; we’ll follow price, not opinions.