The current market situation is explained by a practicing trader and founder of the project Crypto Mentors, Nikita Semov.
On Monday, June 14, Bitcoin quotes reached the upper boundary of the value zone of the entire accumulation, in which we have been for the second month. Within the double-auction structure, the entire $40,000-$41,000 zone is a ‘premium-price’ territory, i.e., advantageous for selling and taking profits.
In nearly two days we have formed a balance in the range $39 500-$40 800, indicating interest from participants and the market and that the exit from this accumulation would be impulsive.
Today the market has provided fresh data pointing to a high likelihood of a Bitcoin drop in the coming days:
- Yesterday there was a false breakout of the upper boundary of the local balance — early shorts were wiped out, removing the obstacle to a move lower. Also this LP formed a delta divergence, which very often points to extremes. Since this divergence is visible even on the daily chart, one can expect a serious move down;
- We have already widened the downward range, and given yesterday’s false breakout, one can confidently say that the current breakout is true. At the breakout extreme ($38 800) we do not see abnormal liquidity, which indicates this is not the end of the expansion, and the price will go down in search of the necessary liquidity;
- A spike in abnormal volumes near the $41 000 level. We are now breaking below them, indicating selling pressure from the inflows;
- Open interest of long positions at $30 750 has increased more than threefold, indicating a surge in buying interest.
Retail investors believe in Bitcoin’s rise, so the probability of their “punishment” is greatly increased.
Thus, we expect a small correction to the zone $39 300-$39 700, followed by a crash in the quotes. The primary target will be the lower boundary of the global balance’s value zone, i.e., around $34,000. If we do not see responsive activity at these levels, the probability of breaking through the $30 000 support level, which acts as a liquidity magnet according to the Price Action methodology, and a move to around $20,000 will be maximized.
Subscribe to ForkLog news on VK!