The market’s current state is outlined by Nikita Semov, a practising trader and founder of the project Crypto Mentors.
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Bitcoin has reached a zone of strong resistance. It is now possible to identify the most likely path for movement and delineate the key levels from which the first cryptocurrency would react in a potential correction.
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On the daily time frame, the price has reached the lower boundary of the volume area — $49 400. In volume analysis, such a level plays a key role and is called the Value Area Low (VAL). Approaching the level is accompanied by weakness in buyers’ movement, signs of which include:
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- a drop in vertical volumes during a rally;
- breaching wave projections according to Price Action and narrowing of the trading range;
- formation of the \”Exhaustion\” pattern by cumulative delta;
- the current month’s maximum volume moving upward.
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Such signals at the boundary of the value area are often precursors to the start of a corrective move.
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However, it remains too early to speak of a downward move from the current marks, as the price stays within the balance bounds of the previous week, highlighted on the chart. A characteristic \”hook\” has appeared from below, indicating local support for Bitcoin by large buyers.
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The most probable scenario is the continued drawing of balance within the specified bounds. Then — a rise with a deeper test of the Value Area Low at $49,400 and a subsequent drop to strong support levels:
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- $45 100;
- $41 100-$42 200;
- $39 700.
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An interruption to these scenarios would be a break and hold above the $49,000 level. In such a development, long trades could be considered after testing VAL from above.
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