After a successful breakthrough of the most important, in our opinion, price zone of USD 150-160, buyers this week tried to consolidate a successful continued growth. However, sellers still decided to intervene in this process and returned the price below the trendline, under which the price is moving from December 2018. The price has returned to the triangle and the situation is ambiguous. On the one hand, buyers have broken through the price zone of USD 150-160 and already for the second time proven that they keep it:
On the other hand, it is not very believable that the breakthrough of USD 150-160 price zone was true. If we look at the chart on a weekly timeframe, we see a sure green candle, but the volumes do not coincide this candle at all:
Therefore, we think that buyers still have to fight for a price zone of USD 150-160 to prove other market participants their strength and intentions to continue to grow.
According to the mood of buyers, it is clear that the belief in the continuation of growth is falling. This is evidenced by the chart of marginal buyers’ positions:
We decided to show the marginal positions of the sellers on a weekly timeframe. It is better to see the global situation of positions and the trend of movement:
As you can see, marginal positions of sellers have updated the historical low and are globally in the triangle since April 2018. Therefore, we now have a high probability of a rebound and an increase in marginal positions, which may lead to a price fall.
In the wave analysis, the price movement, which took place from December 2018 and represented by a triangle, in which each updated local high was not higher than the previous one, but the corrections were deep enough, we mean it like correction:
Pay attention, how clearly the price moves between the levels of Fibonacci. The first two local highs could not break through 78.6%, and the current high stopped at 100% of the wave a.
If you look closely, then the last impulse of the fall began at the end of September 2018. At the moment, buyers were able to correct this fall by 61.8%:
Even if buyers intend to continue growing, although the volumes do not yet confirm this, we think that before should be the test of USD 150-160. However, this test should take place in a genuine fight, rather than on a lazy price, drifting without volumes.
Next week, we expect the sellers to be more active and demonstrate their strength. The critical point for sellers is USD 190. If buyers can fix above this price – we will consider an alternative growth option. Meanwhile, the price is within the limits of the triangle and continues to check the nerves of investors for strength.
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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.
Chart Courtesy: TradingView