A practising trader and founder of the Crypto Mentors project, Nikita Semov, explains the current market situation.
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Bitcoin has finally broken below the $30,000 level. What lies ahead — a rapid slide to $20,000, or are there still chances for a reversal?
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Let us step back and look at the broader picture. We did not merely breach a round figure or a psychological level, which of course is $30,000. First, it marks the lower boundary of an important volume cluster from previous purchases. It is there that positions were accumulated to subsequently reach new highs.
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A break of the above level means there are no longer any sellers who bought Bitcoin at the end of January. They are no longer interested in these levels.
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Secondly, this is a break beyond the value balance zone in which the price had been trading since mid-May. This means we are below all supports and beneath a large amount of volume positioned in sell orders. There is currently a hollow beneath us, and the nearest support sits at $19,000.
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Now turn to the near-term outlook — what is happening at the moment.
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First, this is not a full breakout, but only the first fragment of the forthcoming downward movement. Why do we think so?
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There are no signs of liquidity drying up — we have not run into any wall or a large buyer. This can be described as a temporary breather.
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In addition, the market still harbours a large number of long-position holders who bought within the last month’s balance. Their liquidations are now very near.
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The liquidity behavior in the $28,500–$29,000 area suggests a manipulative nature of the setup. There is no reaction as the price approaches, nor any short-term spoofing. This indicates that they are placed there to \”convince\” naive longs that a major player is behind them and that they should buy to cover.
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Both the global and the local pictures point to an imminent resumption of downside activity and the emergence of a new strong impulse toward $20,000.
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