A practicing trader and founder of the project Crypto Mentors, Nikita Semov, explains the current market situation.
The spread of the last selling bar is one of the strongest in the past six months on the weekly time frame. Volume is also among the largest.
When comparing buy volume with price movement and sell volume with a similar movement, it appears that the bear is more confident. There is evident selling pressure, but with a weak result that reaches into the buying zone. Consequently, we expect a buying bar after the close of the second type.
From Japanese candlesticks, there is no classic pattern, but there is a ‘bodzu’ candle, which is an indicator of local selling pressure.
Price Action and VSA
On the daily chart, the attempt to resume the buyers’ efforts from the left side looks very ineffective. Consequently, a decline in quotes is likely.
Sell-offs maintain their usual momentum. On the 4-hour chart, the challenge is even to exceed the local high, although the attack starts from the support-bar range.
The most logical and justified in the current situation is to expect a liquidity grab from the daily time frame, the formation of the UT + TUT pattern, and the resumption of selling from $10,800 via BUI + BTI.
Analysis of Horizontal Volumes
Global picture. Quotes have reached the target value of $9800, which marks the boundary of July’s value zone. There are currently no signs of a reversal or strong defense that would hold this range.
The most likely scenario will be a balance/small correction and a move toward the core of $9110-$9320, where market reaction will need to be observed.
Medium-term Perspective
Note the zone of $10,750-$10,825, which was also a strong support in August. As these values are breached, pushing volume arrays emerged, which now act as resistance plates.
There has been no downside fixation or abnormal volumes, which suggests weakness in buying. The delta also confirms uncertainty and the lack of price control.
Local Situation
Let us turn immediately to the lower histogram, where a buildup of positions can be observed. This indicates that the balance will soon be disrupted. It is quite likely, according to auction structure laws, that we will see an expansion upward into the zone $10,605-$10,900, which is entirely clogged with selling delta arrays.
Also note the spike in buying activity shown in the screenshot. It indicates the inefficiency of buying actions and the sellers’ limited defense.
Conclusions
The clear direction for the coming week is a resumption of selling. However, this could occur via a test of the volume-delta arrays with the UT pattern of local extrema.
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