Nikita Semov, a practicing trader and founder of the project Crypto Mentors, explains the current market situation.
Global picture
Bitcoin remains in a consolidation phase. A narrowing dynamic is clearly visible, and a triangle pattern is evident. It is not possible to predict with certainty where the move will come from, but some premises can offer clues:
- Currently Bitcoin is in a downtrend phase, as it sits below all major volumes positioned for selling. Typically, balance formations unwind in the direction of the main trend, and in this case — it\’s a short;
- The current accumulation is forming in the zone of the volume array of the previous buyer. The lack of reaction indicates buyer weakness;
- Delta slice shows a large amount of market purchases occurring in the current range. Given the absence of accompanying signs of initiating activity from buyers, one can suppose these are retail traders waiting for a move to resume. This adds additional liquidity on the sell side beyond the $29,000 level.
The most likely outcome is the breakdown of the current triangle to the short side, but to make safe trading decisions it\’s better to wait for the breakout from the formation. This will allow seeing real confirmation and facts, rather than relying on subjective opinion.
Local picture
At the range boundaries, reactive activity is forming — it indicates accumulation of a certain position, not mere rotations. This confirms that the breakout from the triangle will be impulsive.
There are also a number of key support and resistance levels:
- $37,800–$38,000 — resistance;
- $39,600–$40,200 — resistance;
- $34,400–$35,000 — support;
- $32,400–$33,400 — support.
A breakout from accumulation can be considered either by breaking above $40,200 or below $32,400. Both breaches will provide a good opportunity to enter a position in the direction of the impulse.
Currently we expect a narrowing of the range within the levels $37,800–$38,000 and $34,400–$35,000, followed by expansion and a resumption of the trend.