The trader Илья Мещеряков explains the current market situation.
In recent days the cryptocurrency market has been in a brief lull: Bitcoin volatility is easing with periodic sharp and short-lived moves, while altcoins are largely driven by low-cap coins.
Volatility decline is a standard market movement pattern, described in technical analysis as a “triangle” pattern. Sellers and buyers push the price, producing lower highs and higher lows, resulting in no clear trend. In the end this will be followed by a rapid breakout from one of the zones and a move beyond the first extreme.
In this case we are seeing the pattern complete and volatility approach its limit. An example of the final stage is the recent BTC/USDT breakout shown in the chart below. Bitcoin’s mid-term prospects will be clear within three to four days.
A breakout to the upside can be recorded at $58,900; downward — at $55,800. The height of the breakout is about $6,000.
Prices often give false breakouts of such figures, so emphasis should be placed more on the zones of the previous seller ($60,000) and buyer ($54,500).
Symmetrical triangle on the Bitcoin chart with price extrema and support/resistance levels. Five-minute BTC/USDT chart on Binance from TradingView.
From a short-term perspective we observe the standard squeezes of buyers and sellers (marked by arrows on the chart below).
A sellers’ squeeze previously occurred in the $58,200 range, so the current move is headed to $56,100, which aligns with the triangle’s lower boundary. The inertia of such a move could push it into the entire red zone (lower) with a lower range near $55,400.
Short-term Bitcoin moves and the marked squeezes of buyers and sellers with the zone of expected movement (red on the right). Five-minute chart of BTC/USDT on Binance from TradingView.
The long-term trend for the first cryptocurrency is bullish. A signal for a change would be a break of $43,000. On a global scale, the period of decline in Bitcoin dominance makes sense, continuing for a long time due to surges in small-cap coins, and now also for heavyweight tokens like XRP.
Investment strategies should not require major changes, while mid-term trades remain uncertain. In the short term we observe a stronger downside bias due to higher open interest in longs.
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