Trader weighs the odds of Bitcoin breaking out of its range

A practising trader and founder of the Crypto Shaman project Crypto Shaman Vadim Shovkun.

Bitcoin has been trading in a range of $41,100-$44,200 for two weeks. The main reason for the current downturn is the Russia-Ukraine conflict, in particular the escalation in Donbas. Today U.S. President Joe Biden said he expects an attack on Ukraine in the coming days. This is most likely merely a pretext for a drop in quotes.

Analyzing the angle of attack by market participants, one can speak of intensified selling pressure. Meanwhile, the volume in the latest eight-hour candle is comparatively lower. The weekly timeframe at the moment is forming two pin bars. The volume of trading within this two-week range is concentrated right at the upper boundary, which can be described as serious seller restraint on buyers.

As long as the asset remains flat, the primary expectation is movement from boundary to boundary. The levels $41,300 and $40,600 are potential rebound points. The latter is likely to form through a micro-flat.

Bitcoin remains in a precarious position. Its correlation with the S&P 500 is very high, while the index itself looks increasingly weak. The momentum indicator could not bounce; if Bitcoin closes below $40,600, the next potential support zone would be around $38,500.

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