The standard model of price movement continues to operate on the market. After each active movement, the market stops for several days and is traded in consolidation. That’s what happened this time.
After a one-day growth from 8 February, the price stopped and traded within a USD 50 range. Buyers stopped their movement in front of the price zone of USD 3,770-3,800. In this price zone, there is the upper trend line of the falling channel in which the price moves from 24 December:
Of course, predicting where the price will come from this consolidation is anyone’s guess thing, but we will express our opinion. At this time, it seems to us that in this consolidation, buyers are trying to redeem the whole offer of sellers so that sellers did not interfere with them while continuing the growth and did not stop moving upwards because of their sales. Consolidation takes place in lowered volumes. That is, sellers do not take the initiative into their own hands. Also, yet we have not seen attempts by buyers to break through the price zone of USD 3,770-3,800 at large volumes.
When this price zone is approached, sellers begin to be active:
Therefore, we expect the continuation of the consolidation to and at least an attempt from buyers to break through this price zone to see their potential. And at the moment, consolidation continues and we will further talk about the mood of the market participants.
The fear/greed index is growing and now its value is 46.
The last time such a high rate was observed was on 4 January, after which in a few days the price began to sharply fall. Therefore, if a good mood and a belief in growth are not maintained by volumes and aggressive green candles in the near future, we think that the hopes of all buyers will be destroyed again.
The marginal buyer positions are seeking to increase but the higher the price, the more uncertain the buyers are:
Sellers also behave unconvincingly and do not show their clear mood:
In our opinion, the whole problem is in volumes. Even if we analyze the growth from 8 February, then even though the volumes look exaggerated relative to neighboring volumes, in general, this is not the liquidity that is needed for the growth phase after the prolonged phase of the fall:
That is why we need confirmation of the intentions of the buyers — namely the breakdown of the upper trend line and the price zone of USD 3,770-3,800. This is the first local target that will show the seriousness of the intentions of buyers.
If sellers break through the current consolidation, then the critical point for buyers will be USD 3,500. If buyers do not keep this price, then their attack failed, and then we expect a continuation of the fall.
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About the Author: Peter Oleshchuk is a trader and technical analyst. He has spent two years studying and analyzing the crypto market. Image Courtesy: Bitcoin News
