A practicing trader and founder of the Crypto Mentors project, Nikita Semov, explains the current market situation.
As expected, Bitcoin’s price not only reached $52,000 but also broke through the value area. The expectations for the week ahead are to buy.
Firstly, we are above the Value Area after testing the maximum balance level. This is one of the most reliable setups when exiting any accumulation, indicating a looming powerful expansion.
Secondly, from below appeared a substantial amount of defensive and pushing volumes, which led to the expected result. On the sell side, such activity is not observed.
In addition to the volume-based setup, one can notice the Price Action pattern “Squeeze,” which was mentioned in the previous review as the most likely scenario. This formation signaled a weakening of the $52,500 level and has already been resolved positively.
In 71% of cases, the JOC pattern (also known as a breakout) leads to “Back-To-Creek” (a test of the breakout). Given the volume currently forming in the $53,950-$54,125 range, a close below $53,950 would lead to a correction.
Notable stop levels for the corrective wave are $52,900, $52,500 and $52,150.
For the current week, we expect long positions and perhaps a new all-time high. The only caveat is to watch the $56,000 resistance level. Volumes at this level are unlikely to reverse the move, but may cause a pullback.
Before breaking higher, a minor correction to the levels mentioned above may occur.
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