After breaking through the price zone of $115-$120, the sellers stopped at around $100. We wrote about this scenario in the previous weekly analysis.
However, if we analyze the nature of the price movement and the enthusiasm of buyers we think that the fall has not ended yet. The week started pretty well. Buyers have tried to organize growth on big volumes, but to overcome the falling trend, one candle with a large volume is not enough. Moreover, this did not happen on the big timeframe:
We did not see much interest among buyers to purchase at $ 100. The volumes were not enlarged with a local reversal. When sellers saw the opposition they just stopped selling and decided to relax and see what buyers can do:
Though buyers could not even test the liquid price zone of $117-$120, a large amount of liquidity has gathered in this zone. Only at the third attempt, sellers were able to break through the price zone down. Please pay attention to large volumes which were at the first attempt:
Inasmuch as during the month, the volumes of the market are constantly falling and has practically come to a standstill. So, we do not see the preconditions for growth in this situation. It is much more probable to continue the fall and breakthrough $100 with the ultimate target of $ 89.
Marginal buyers’ positions look bad. Now they are at the historical high and we do not see the preconditions for their increase. There are still a lot of buyers on the market who keep this coin and it can be badly affected during the fall.
If buyers in panic begin closing their positions they will only aggravate the fall (and buyers have a good prospect to continue closing their margin positions). Therefore, only the interest of those buyers who have remained outside the market can help in this situation.
Sellers are also not self-confident and have undefined mood:
On a weekly timetable it is clear that the price is looking for support to continue the growth:
We are not sure that the price of $100 will be this support because the current growth pattern is more like a correction and buyers need to go through another test and keep the price in the range of $100 so that we can be sure of their intentions. Meanwhile, the probability of a continuation of the fall to $89 is more likely.
Wave analysis confirms that $89 is the last hope of buyers to continue growth. The wave Y is forming now. In the price of $89-$90 wave Y = W * 1.618. This is the maximum meaning that is acceptable for a correction that began in December 24th. Also, liquidity is concentrated in this price which can be seen in horizontal volumes. Therefore, if sellers increase their aggression and breakthrough $100 at a price of $89- $90 we should see what buyers are capable of. After this test, we will understand what will await this coin in the near future. Meanwhile, we are keeping an eye on $100 and expecting an increase in volumes.
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About the Author: Peter Oleshchuk is a trader and technical analyst. He is studying and analyzing the crypto market for about 2 years.