Buyers broke the upper limit of consolidation and tested $7283.
The daily candle closed at $6810, creating a false breakdown.
Fixing above $7070, buyers will open the way to $7700.
Yesterday’s trading day on Bitcoin market was quite hot and emotional. Buyers were able to break through the critical point $6830 and upgrade the local low, testing $7283. The breakdown looked rather ambiguous considering Bitcoin price growth and volumes. As a result, the weakest attack of the three was able to break through the upper limit of consolidation. However, right after the test of this mark, buyers were able to lower the price to $6687. In such a way they created a giant false breakdown on all large timeframes, starting from 4-hour timeframe ending with the daily one.
If you look closely at the daily timeframe situation, you can see that within one hour sellers were able to cover the movement of the two previous hourly buyers’candles with high volumes:
However, sellers decided not to continue the attack. It this is clearly evident from consolidation which we highlighted with the red oval. Thus, buyers kept their local trend line and are now launching another attack. The critical point is at the mark $7070.
As you can see on the chart, there was a certain amount of liquidity which sellers will protect. If buyers do not succeed in fixing above this mark today, our main scenario of the price fall in Bitcoin market remains valid. Although, Bitcoin price is already trading above the critical point $6830 for the second day. Therefore, the probability of an alternative scenario in the form of continued growth to the level $7700.
If you look at the marginal positions of market participants at the moment of breaking the upper limit of consolidation. It shows that both buyers and sellers closed their marginal positions:
Nevertheless, it is an interesting fact that in the current growth, buyers are much more active in closing their marginal positions than sellers.
According to the wave analysis in Bitcoin market, we can see that the current wave (C) is in 1.4 times larger than the wave (A):
Buyers were able to move beyond the growth channel. The current local attack of buyers corrected the fall from $7283 by 61.8%. If buyers pass the next level of Fibonacci at the mark $7070, the chance of Bitcoin price fall with the final target $5100 will be significantly reduced. Let’s see how today’s daily candle closes and tomorrow the situation should be as clear as possible.
Image Courtesy: TradingView