After a rousing attempt by buyers to break through the price range of $150–160, which started from 18 February and ended on 23 February, sellers were able to drastically change the situation in their favor. Within one day, the price fell by 20% and consolidation was on the market during the whole of last week. Buyers were not able to organize even a deep rollback after the fall, and this consolidation was more like a small stop, after which a new strong impulse down emerged. If you build levels of Fibonacci, it is clear that buyers were able to correct the fall from 24 February by only 23.6%:

Such a rollback can only testify to the weakness of buyers and the reluctance to start growth from current prices.

Therefore, we do not change our forecast and continue to wait for a test of the price zone of $116–120. In the previous analysis, we wrote that this price zone is of great importance. First of all, in this zone, the price always either bounces or stops in consolidation for a long period:

And if buyers or sellers manage to break through this price zone for the first time, then this happens in large volumes. Therefore, for sellers, it will test their strength and readiness to continue to fall, and for buyers the chance to continue consolidation in the triangle, which lasted from November 2018.

In addition to the strong price zone, now there is a lower trend line, which buyers were able to protect on 7 February. This fact only reinforces the importance of the price range of $116–120.

If you analyze the mood of market participants, then buyers are displaying calm:

Despite an obvious initiative of sellers, buyers are in no hurry to close their positions. However, if panic starts on the part of customers, then the prospects of closing positions are big. Now the positions are near the historical high and the trend of position growth is slowly suspended. Therefore, we advise to be careful and to be prepared; if buyers do not keep the price range of $116–120, a sharp fall can continue.

Marginal positions of sellers are not increasing and are now on the lower limit of consolidation, which began on 18 August 2018:

On the whole, everyone is waiting for a confident movement and is not ready yet to actively build up their positions.

According to the wave analysis, now there is a correction after the fall wave from 13 November. If sellers break through the price range of $116–120 (we can extend it to $110–120), it means that the correction has ended and a new phase of fall has begun with a minimum target of $78–79:

If buyers keep this price zone, then there is a great chance to continue growth and after breaking through $150–160 to test $188–190:

Therefore, we expect the behavior of buyers in the price zone of $116–120 to estimate future prospects.

 

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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.

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