Trader weighs likely Bitcoin price moves after a correction

A practicing trader and founder of the project Crypto Mentors, Nikita Semov, explains the current market situation.

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History tends to repeat itself, and the market is playing out the same scenarios. As in 2017, we are seeing a correction from a level that had been discussed as likely.

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Such a plunge is a classic example of a shake-out before a global bull run, and there is no need to fear trend-based corrective rebounds. The development of any organic trending move consists of alternating local highs and lows. In an exponentially growing market, gaps form, which are most often filled, and for this reason any pump is followed by a dump.

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VSA and Price Action

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Analyzing price through the lens of these methodologies, we see a classic balance with deviations in both directions. This consolidation is one of the possible paths to overtaking the historical high, and therefore we do not recommend selling all assets or, even more so, shorting against the clearly persistent uptrend.

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Consolidation within the range will allow for longs up to $19,000. To achieve this, one needs to see a weak response from the bears in the red zone, which begins to appear in the support-area with the formation of BUN.

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Analysis of Horizontal Volumes and Deltas

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Despite a fairly significant drop, many factors point to its manipulative nature rather than a reversal in the last movement.

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First, note the concentration of volumes at local minima, indicating protection of values via limit orders [1]. Second, open interest data show that participants—both voluntarily and forcibly—were exiting positions during this move. Importantly, no trend will develop without support from OI [2].

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Additionally, a reversal pattern is beginning to form: a change in the sequence of local highs and lows in combination with a close inside the deviation on VWAP. This points either to the formation of a prolonged balance or a reversal [3].

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Resistance to return to previous bounds will be the $18,000 zone, where a powerful limit seller has exerted effort.

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