A practising trader and founder of the Crypto Mentors project, Nikita Semov, discusses the current market situation.
Key takeaways
- The edge remains with sellers. A fall to $11,000 is possible.
- If sellers permit a breakout above the $11,900–$12,000 zone, the balance of power will shift in favour of buyers.
Bar-by-bar analysis
Last week’s bar has a very small spread. This is the first selling spread to appear in the zone of a large seller to the left. The move was very weak, indicating a lack of bears’ initiative. An ineffective continuation followed, which means buying dominates.
Average rising volume fully correlates with the spread. We expect a bar of buying this week. On Japanese candlesticks, when two bars are joined (“umbrella” and “hammer”) we get the “doji” formation — a sign of price balance, a breakout, and thus we expect the week to close with a buying candle.
Price Action and VSA
From a significant selling volume, this indicator signals a lack of buyer interest above $12,122. Be cautious in the red zone; longs should be seriously considered only after a weak selling response emerges from the selling zone, provided there is a continuation on rising bars.
Horizontal-volume analysis
Globally the bias remains bearish. We expect a mirrored test of the important selling range $11,870–$11,900. Its hold is critical for the continuation of the downward trend.
A bit more locally we see a test of the core with a surge in volumes, which acts as protection of the volume array. The test does not proceed as smoothly as desired, so a move higher toward $11,900 remains relevant. However, it should be noted that buyers are currently finding it much harder to maintain the initiative, so the appearance of a strong bear could completely break the up-move.
Over the last two days we see a classic accumulation–distribution pattern. Among positive signals: the cumulative delta shows buyer control, though this control is fairly weak.
Analysis of HFT algorithms shows increasing activity at the extremes, which has led to the fading of the long movement. We do not rule out a breakout to $11,900, a new volatility spike due to high-frequency algorithms, followed by a rapid decline.
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