Practising trader and founder of the Crypto Shaman project Crypto Shaman Vadim Shovkun explains the current market situation.
Since the previous overview, the situation has changed markedly. After a prolonged consolidation and a small correction, now is the time to take stock of what’s happening.
After a modest pullback the price has hit the boundaries of a wide trading range of $18,200-21,800. The quotes are also above the upper end of the $20,800-21,400 range. The fact that the price sits above all current support levels signals a lack of buyer dominance at the moment.
Attention should be paid to vertical volumes. Since the start of the rally, they have fallen, indicating only modest selling activity. The sellers stopped restraining the up move, and during the recent pullback the volume was disproportionately small.
The RSI indicator, which had a triple bearish divergence, is fully unwound.
The main argument in favour of a rally is the presence of fresh FUD despite there being no downward price move. The situation repeats itself, just as two months ago when bitcoin was around $17,000. Negative sentiment emerges, the crowd fears, and the price moves. As a result, the market rises.
Comparing the waves of buyer demand on January 20 and seller pressure on February 9, one can see that the price remains within the green support candle zone from January 20. There was no bullish engulfing even at the moment.
Based on these factors, a rise to $23,300 seems logical. It should be noted that after reaching $23,300 the probability of crossing the important level of $25,188 rises sharply. It is very likely that the price will then impulsively reach up to $26,000-$27,000.
A favourable environment for additional Bitcoin purchases is evident. The market has retraced, and with a good risk–reward ratio one can buy the leading cryptocurrency with growth targets above $25,000.