Buyers closed the daily candle at $8810 and behaved rather passively.
The probability of repeated test of $8650 is quite high.
The critical point of buyers’ trend remains at $7700.
Yesterday’s trading day on Bitcoin market was too calm and peaceful. After dangerous and aggressive attacks of sellers on 10-11 May, buyers are calmly trying to fix above the range $6650-6850. The daily candle closed at $8810, which in our opinion is not enough to confirm the strength of buyers in the range $6650-6850. Yes, yesterday’s candle was able to cover the body of the candle on 11 May, but pay attention to the daily trading volumes, which is half less than the previous ones. Perhaps after the long-awaited halving, market volatility has fallen and now we should expect such dynamics of Bitcoin price movements. In any case, a few days of observation will answer this question.
Despite the closing of the daily candle above the opening price, market sales were more than purchases by 2.7%. This fact makes us wonder whether buyers have enough strength to buy the entire offer of sellers.
Given the nature of price movements and volumes, the probability of repeated test of $6650 is quite high. This test should show two moments:
1) How many sellers are left who are ready to actively sell at local lows.
2) How aggressively buyers will build a counterattack.
In case of weakness of buyers Bitcoin price will continue falling with the final target $7700.
In the 4-hour timeframe, we can clearly see that buyers have not yet managed to fix above the main horizontal volumes in Bitcoin market:
We have also highlighted a local range $6650-6700, in which we will observe the fight of market participants. If Bitcoin price falls in this range without much aggression and buyers can keep it – buyers will start a new attack with the first target $9200-9400.
On the dominance chart of BTC we see an indicator stop in the range 67.55% -69%:
As we can see from history, the last attack of buyers ended with a test of this indicator. If this range is not broken down by the end of the week – it will be a good base for breaking the upper trend line of the triangle.
Therefore, if today’s trading continues with identical volumes on Bitcoin market, we will expect a second test of $8650, where we will see the current strength of sellers. An alternative scenario is the continuation of the passive growth of Bitcoin price to $9200-9400.
Image Courtesy: TradingView