Trader outlines condition for Bitcoin price rise to $34,000

The current market picture is provided by practising trader and founder of the Crypto Mentors project, Nikita Semov.

Since Bitcoin touched the $29,300 mark, the price has retraced by more than 10%, breaking an obvious three-month downward-trend squeeze. What is this? A market reversal or a crafty correction?

We have not removed the liquidity shelf located at $28 750. This is the fourth touch; behind this horizontal level lies a substantial amount of liquidations and stop-losses among long positions.

Why are we confident? If we look at the cumulative delta indicators on the two most liquid exchanges (Binance and OKEx), we can see that, in the overall balance, buys dominated since the end of May. Open interest (OI) data also point to a steady influx of new long positions — this can be understood by the combined analysis of delta and OI.

Given the manipulative nature of the crypto market, it is hard to believe that the horizontal level will be left alone. We will either break through it or make a false breakout.

Since 90% of traders use classic technical analysis, in which a break of the trendline is a signal for a change in direction, most of them and investors are currently bullish. This is reflected in the rise of the cumulative delta into purchases.

After the trendline breakout we ran into the lower boundary of last month’s value area and, coincidentally, the POC of the entire three-month balance. Given that these volumes were unwound into selling, we are currently in the sell zone.

For the more local picture, there is no clear downside priority yet — we have returned to last week’s value area, which means a high potential for continued rotations in the range $31 100-$32 800. A breakout of one of the boundaries would be a trigger to start a new impulse.

From the ultra-local factors we can also observe the positioning of yesterday’s volumes into purchases such that the zone $32 150-$32 250 now serves as support. Taken together this forms a tightening formation around the $32 800 level. If we see a buying reaction from this zone, one can expect a move higher to $33 500-$33 900.

Otherwise, the expectation of continuing a flat in the range $31 100-$32 800 remains, with a global potential to move lower given contextual signs of buying weakness and manipulation.

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