The trader Илья Мещеряков explains the current market situation.
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The week started fairly well for Bitcoin. The price even managed to break out of a local trading range to the upside. However the impulse did not last long, ending near $35,000. On the following day the leading cryptocurrency again tested the support zone around $30,000, the third time in the past month.
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There is heavy selling pressure from bears — the highs of the last three weeks are marked on the chart below (red arrows). Buyers have failed to surpass the previous peaks and are holding the support zone (green line) with increasing difficulty.
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Depending on the construction method, one can identify either a ‘descending triangle’ or a ‘descending wedge’. Both raise concerns about further upside, given the large scale of these patterns.
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The global picture is that since breaking through $20,000, Bitcoin has not undergone significant corrections. The current formation could well become a distribution zone — a moment of profit-taking by large capital.
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Notably, the price has more than doubled the previous high. This attracted a large influx of new capital, enabling profit-taking by major players.
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Descending triangle with a green support zone, and decreasing price highs (red arrows). Hourly chart BTC/USDT on Binance Exchange from TradingView.
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On the smaller time frame, there are prospects to reach the upper boundary of the descending triangle — around $33,800, which would also allow stop-loss levels and liquidations of sellers.
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Short-term positions should be treated with maximum caution, as there is parity in open interest between longs and shorts. On small timeframes the price simply swings up and down.
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Strong intermediate levels between the support zone around $30,000 and the upper boundary of the triangle are $31,130 and $32,180. If price rebounds from them to the upside, one can consider a long with the previously stated target of $33,800.
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Price bounce off the support zone and the potential bounce target (in red), as well as intermediate support/resistance levels. Fifteen-minute chart BTC/USDT on Binance from TradingView.
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In summary, the expected decline in volatility over the coming days. The price is increasingly confined to a narrow range within the current formation.
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Short-term ideas are becoming less relevant as a breakout and subsequent impulsive movement approach. A downside breakout and movement toward around $24,000 is likely. On the other hand, a breakout above $35,000 could shift the current formation into a global and prolonged flat.
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