A practicing trader and founder of the project Crypto Mentors Nikita Semov explains the current market situation.
Bitcoin has been consolidating for the second week running. In that time, indirect signs of an exit from the current range have begun to appear.
There is a liquidity shelf below $30,000. If the price ends up below this zone, an avalanche of stops will trigger a further impulsive movement down to $19,600, the first serious level of purchases. This same level also acts as something of a “magnet” for the price, as any asset tends to move toward a zone of higher liquidity.
Absence of adequate revival in demand from the buy-side volume around $34,000. Since there is no initiating activity from the bulls after the significant sell-off, one can suppose that the breakout from the formed range will be downward.
Wyckoff distribution — a pattern indicating the existence of a dump of positions at the highs with the range protected by the seller. The pattern is also confirmed by a delta slice showing a clear tilt toward sellers. Such a formation reinforces expectations of the continuation of the existing bearish trend.
Now let’s break down the meaningful levels. Cluster analysis shows the distribution of stop volumes in the range $38,000-$39,000. Accordingly, this zone will act as resistance.
If this level is breached, price movement toward the next resistance at $45,000 can be expected.
The local support zone is $33,600-$34,000. Also a key level and the cancellation of any long scenarios is the $32,000 mark. On a break and retest, there will be a significant chance of impulsive development of the asset downward toward the $19,600 zone.
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