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How One Bearish BTC Setup Delivered Multiple Times
Special Edition — Meridian Compass
mark schaefer
December 16, 2025
The Institutional Playbook
Most traders treat a setup like a one-shot event. You either catch it or you miss it.
That framing is exactly what causes traders to walk away from working ideas too early.
BTC in December was a clean example of the opposite. One bearish structure stayed intact for days, and price offered multiple decision points off the same resistance zone. If you only engaged once, you left opportunity on the table.
I flagged this framework publicly on December 5 — in this newsletter, a short video, and several posts on X — not as a signal, but as a map of the resistance, the risk, and what would tell me the idea was wrong.
This Special Edition breaks down the tell that kept the setup alive, how institutions manage each retest, and the exact conditions that would have forced a reassessment.
The Structural Map
BTC volatility had compressed to multi-month lows (Bollinger Band width) before price broke an upward-sloping trendline and dropped sharply. That initial break accelerated into a broader move that ultimately carried price from the 110K area down toward 80K.
After a decline of roughly 30,000 points, the priority shifted from predicting continuation to mapping structure. Large volatility expansions rarely resolve immediately. Markets need time to adjust to a new regime.
On the bounce from the 80K low, momentum was extremely oversold. 78K stood out as key downside support — the 38.2% Fibonacci retracement of the entire move.
From there, resistance needed to be defined. Fibonacci retracements drawn from the cycle high to the 80K low highlighted the 93–94K zone as first-order resistance. The upper Bollinger Band, reflecting the prior 20 days of structure, sat near 94K, with the next major retracement level higher at 98K.
That created a clear map: defined support below, layered resistance above, and volatility beginning to normalize as price adjusted.
The Tell: Why the Setup Stayed Valid
The first bounce into the 94K area produced a clean bearish reversal, followed by a pullback toward 87K. More important than the move itself was what didn’t happen afterward.
Volatility continued to compress. Price failed to reclaim the upper Bollinger Band. Each subsequent rally attempt stalled in the same resistance zone.
On later tests, momentum weakened further. Bearish divergences developed across multiple timeframes — not tied to a single candle pattern, but to a zone where upside energy continued to fade.
That combination — compression, repeated failure at resistance, and deteriorating momentum — told you the structure was still intact. This was not a breakout environment.
The Institutional Playbook: Managing Each Retest
When a setup remains valid, institutions don’t look for a single perfect entry. They manage decisions.
Initial test: Engagement as resistance is first defined.
Subsequent tests: Improved risk-reward as price returns to the same zone.
Management: Partial profits taken on rotations lower, with flexibility to re-engage if structure remains intact.
Risk was clearly defined throughout.
Shorter-term invalidation would come from a close above 95K or sustained price action above the upper Bollinger Band.
Broader invalidation would require a close over the 38.2% Fibonacci retracement near 98K, suggesting the move lower may be complete in the near term.
Until one of those conditions were met, the bearish structure remained intact.
The Takeaway
Structure doesn’t expire because you traded it once.
It expires when price proves you wrong.
As long as BTC remains below defined resistance and volatility stays compressed, the framework remains the same. When structure breaks, you reassess.
P.S. If this framework is useful, the 10-point Institutional Trade Checklist is how I formalize structure, risk, and invalidation before any setup.
DM “CHECKLIST” on X (@schaef45809).
Opening a private analysis group in Q1 2026 for real-time market structure in FX, crypto, and futures. Same framework-based approach I've used for 30 years - you'll see how I read structure as it develops.
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Meridian Compass is brought to you by Mark Schaefer, a quantitative portfolio manager with over 30 years experience developing and trading systematic strategies in global futures and FX at major banks and hedge funds.
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