The daily candle on 4 May closed by $35 below the opening price.
The main liquidity zone of buyers is in the range $8700-8850.
Fixing above $9050, buyers will significantly increase their chances to test $10,500.
Yesterday’s communication between Bitcoin market participants on “whether the balance of power has changed” has reached a stalemate. As you can see from the daily candle, sellers tried to continue the correction by lowering Bitcoin price, breaking the liquid range $8700-8850. However, buyers did not allow to fix below this range, forming a large pin down on the daily candle. Thus, the daily candle closed at $8865, $35 below the opening price, but above the critical range $8700-8850.
Buyers confirmed our yesterday’s triangle scenario, turning the price quite sharply and without much obstacles on the part of sellers. The volume of trades yesterday was average. Given the formation of the triangle, it indicates a fight between the participants, rather than a banal temporary stop of Bitcoin price.
If we consider the situation on Bitcoin market in a 4-hour timeframe, the narrow range $8630-8700 is noticeable in terms of horizontal volumes. In this range, for the second time, buyers form a local price reversal:
In addition, on 30 April, sellers were able to test the mark $8530, after the breakdown of which buyers aggressively pushed Bitcoin price up to $9200. This time sellers again stopped at the mark $8530, but no breakthrough attempts were made. To break the triangle down, sellers need to keep $9050 and stay below $9630. In this case, a breakdown of $8530 will be a matter of time.
On the dominance chart, we see the update of the local high at 67.21%:
Bitcoin was weaker than other coins yesterday. It is how the increase of Bitcoin dominance during the fall and the parallel increase of USDT dominance we can explain. Also on the chart we see consolidation below the level 67.55%, which buyers confidently controlled from August 2019 to January 2020. Therefore, a rebound from it will occur with a high probability. This fact adds one point to the probability of correction of the price growth in Bitcoin market from 13 March with a target $7700-8000.
Summarizing the above, the targets after exit from the triangle remain constant: $10,500 in case breakdown up and $7700-8000 – in case breakdown down. Given the growth of Bitcoin price before consolidation in the triangle, the probability of breaking up is higher. However, unsuccessful fixation of the price below $9050 will increase the chances of breaking the range $8630-8700.
Image Courtesy: TradingView