The week that ends today was not special or critical. The general situation in the market has not changed. During the whole week, buyers tried to break through the price zone of $3560-$3580.
A daily timetable clearly shows that correction after the growth from December 17 still continues. Throughout the week, there were small volumes, inherent for consolidation:
The price moves in the wedge and at the moment buyers cannot break through this wedge up. The bottom line of this wedge runs near the price zone of $3230-$3330. For several weeks, we expect this price to test buyers for durability.
In the previous analysis, we wrote that the price zone of $3560-$3580 would be the first test for buyers on the ability to continue to grow. Therefore, at the moment there are two critical points from which the price will depend globally. These are $3230-$3330 and $3560-$3580.
What happened during the week on smaller timeframes? Buyers are trying to squeeze the price closer to the price zone of $ 3560-3580 and constantly reduce the range of trade:
These triangles are more likely to break through upwards. However, as the current consolidation has formed under the price zone we believe that sellers simply exhaust the strength of the buyers to continue their downfall with the ultimate target in the price zone of $3230-$3330. Moreover, the buyers did not show their strength during the local turnout from January 29 and the impression was that the sellers just stopped and gave the opportunity for buyers to trifle:
Comparing the current growth, which lasts a week with a previous fall which lasted 3 days, it is clear that the attempts of buyers are more like a correction and do not pose a threat to change the trend.
Marginal buyers’ positions increased during the week. However, it is clear now that the doubts appeared:
Though, buyers look more confident in their mood than sellers. Sellers’ margin positions are sharply closed when there is a danger. This suggests the fear of sellers to remain in a loss-making position:
According to the wave analysis, wave I is still formed which should complete the growth correction from December 17:
Since this wave is formed in the form of a wedge, we can conclude that the sellers at the moment are weak and cannot organize a strong movement down without allowing profound corrections. Therefore, our main scenario remains unchanged for several weeks and after testing the price zone $3230-$3330 we expect growth from December 17 with the first target of $4050 and the ultimate target of $5150-$5200:
Meanwhile, we have to look at weak price movements that occur without volumes and wait for control points. We wish you patience, calm and do not make trading decisions when it’s easy to manipulate on the market due to lack of volumes. See you in the next analysis!
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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.