Prior to today’s crash, the weekly candle for BTC/USD closed at a price of USD 4,168. The price was traded in the 10% range. The previous week was passive in trade. Compared with the week since 17 December, last week, the size of the candle and the volume is almost three times smaller.
Buyers have greatly increased their margin positions. However, the price was consolidated and this causes suspicion:
Sellers, on the contrary, greatly reduced their position in this consolidation.
After last week’s BTC analysis the situation has not changed significantly. Buyers could break through the price zone of USD 4,000-4,050 but the price did not continue to grow and stopped in the range of USD 4,130-4,200. The sponsors of the break of the price zone of USD 4,000-4,050 were sellers, who since 5 December actively closed their margin positions.
If analyzed with the index of fear and greed then its indicator is 42.
And on the marginal positions of buyers and on this indicator, buyers seem to believe in the continuation of growth. But at the first real attempt to fall, buyers will be selling emotionally. In the previous analysis, two scenarios were discussed. Since the price continues to be consolidated these scenarios have not worked, but they are relevant.
If the mood of traders is analyzed, everyone is waiting for a break of prices up, because they see a figure of technical analysis “reversed head and shoulders”.
This time, even on volumes, this figure is correctly constructed, since for the work of this figure it is required that the “left shoulder” on the volume of the street is the largest, and the “right – the smallest”.
However, this figure can only be considered after the break of the red trend line. Therefore, for me at the moment, the consolidation in the form of a triangle with critical points of USD 4,200 for sellers and USD 3,850 for buyers. Hence, in such situations in the market, we need to wait for breakthrough critical points and act on one of the scenarios.
Nevertheless, expect more to fall from up to USD 3,650 with a final target of USD 3,440. It seems that the situation with marginal buyers positions is critical and in the face of rising buyers will close those positions. Why take with you extra luggage, which at the earliest opportunity will sell and stop growth?
However, at the moment, expect a clear signal from the market and then observe. According to the wave analysis, buyers corrected the fall from October 14 by 23.6% at a price of USD 4,315. Therefore, if buyers can break through USD 4,315 the next stop is USD 4,900.
Growth on 28 December reminds more of the continuation of the growth correction on 17 December both in terms of waveforms and volumes.
This is another fact why the triangle is likely to break down. Due to the fact that the buyers were able to test USD 4,220, the targets in the wave analysis have changed and now the continuation of the fall is possible to USD 3,780 with the ultimate goal of USD 3,500.
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