After breaking through the price zone of $135-140 by buyers, which occurred without increased volumes, sellers had a chance to reverse the situation and continue their fall. However, sellers did not have enough strength to do this. Buyers have shown that at such volumes, they can control the situation and after the test of the price zone of $135-140 by sellers, starting from the new month began a sharp rise to another critical point at $155-160:
At the moment, buyers are able to break through this price zone and even showed that they are ready to keep it. After breaking through $160, two following days, sellers at large volumes tried to lower and fix the price below $155, but so far they have failed. On a smaller timeframe (4h) we see that a growth channel has been formed, in which the price moves, after the failed attempt by sellers to take the situation into their own hands:
Now, we are in the position of a possible global trend change. On a daily timeframe, we see that buyers have tested the top trend line of the falling channel, in which the price moves from January 2018. Therefore, in spite of all the efforts of the buyers, in our opinion, there is more chance of continuing the movement in this channel, because it’s not so easy to break the first attempt, a trend that has been going on for over a year. Therefore, to begin with, we expect another verification of the strength of the price zone of $155-160 with the possible ultimate target of $100:
Marginal seller positions updated the historical low:
At the moment, sellers do not believe in the continuation of the fall and are panic-closing their positions.
The positions of buyers, on the contrary, are on the historical high and move on the wedge from December 2018:
Based on the mood of market participants either sellers and buyers are confident in the continuation of growth. However, we know that when everyone is confident in the price direction, the market can unexpectedly surprise us.
We want to draw attention to one more fact. If you look at the falling channel from January 2018, we see that in December 2018, sellers were able to go beyond the channel. Therefore, we predict that an identical situation may happen with the top trend line of this channel:
According to the wave analysis, at weekly timeframes, we see that at a price of $175, the wave Y = 0.618 * W. After the price touch this price, it sharply jumped down:
Therefore, as long as the price is in the global falling channel and within the blue triangle, we believe that the probability of a continuation of the fall with the first target of $155-160 and the ultimate of $100 is more likely. An alternative scenario is the breakdown of the global trend line with a first stop of $240-250, in this case, it will mean that the falling trend has come to an end and you need to look for the entry points and a new perspective long-term.
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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. Image Courtesy: Bitcoin News