A practicing trader and founder of the Crypto Mentors project, Nikita Semov, discusses the current market situation.
The first thing to note is that we have falsely extended the extreme to $41,400, but we remain in an overall balance of $31,200–$40,800. The price is currently above the Value Area High (VAH) of the entire value area ($38,250), thereby producing a backtest of the above values.
Although we did not position the accumulation properly (not moving far enough away), there are signs of acceptance of new price levels outside the value area. This is a positive signal for a move higher.
From the volume profiles, August opened significantly higher than July’s Value Area. This positions last month’s volume core as purchases, indicating a long bias through a potential test of July’s VAH ($35,800) or POC ($33,500). Such a scenario is suggested by the false breakout of $41,400.
We opened inside last week’s value zone, so the main priority is to expect rotation within the $37,650–$40,500 range.
Below are possible scenarios, ranked from more likely to less likely:
- A small range-bound move in the $37,650–$40,500 range could unfold, followed by a test of $35,700–$36,300, after which the price could break out of accumulation to the upside.
- A variant of the first scenario, but with a deeper test of $32,800–$33,500. This variant is riskier for a bullish development given a move below the balance medians.
- Since we are globally in a range, and a powerful EQL has formed below us, there is a chance of moving to the lower boundary of the $31,200 range. However, in that case one can expect with a high probability a false expansion of the horizontal to $28,750.
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