For the third week, prices in the crypto market are growing and delighting the eye of those who managed to buy on a local bottom when it seemed that the price would continue to fall vertically down and give hope for a bright future for investors who bought coins at more expensive prices. However, what scenarios of the price movement are possible in the next week and which of them is most likely to happen? Let’s try to figure it out with an example of the ETH coin.
The previous two-week candles closed with a growth prospect and on large volumes. Though, the first candle was able to absorb three and a half traders candles. The second candle, although it had a larger volume but did not close so confidently:
If you compare the margin positions of sellers with the ETH chart, it is clear that the sellers began to close their positions and record profits since December 10, which helped the price to grow so rapidly, closing its positions with purchase orders:
A certain part of the sellers opened their positions at a local minimum in the range of $120 to $85 and was forced to close these positions to the detriment of market orders for purchase:
During the marginal positions growth, buyers behave uncertainly. Pay attention to how different the closing positions on the first coin rollback are:
Buyers are diffident, so at the first opportunity, they sell.
The following week, buyers tried to break through the price range of $140-$160 but the price of a weekly candle closed below this price zone.
What is the price zone?
In May 2017, buyers needed a lot of efforts and volumes in order to break through the price zone upwards and then to keep it up. Only after that, the price continued to move upwards:
In July 2017, this price zone again rebounded and buyers began the final growth to $ 1,400. Therefore, for me, this is an important range that will show if buyers are able to continue the growth.
If you run a channel of falling wave price that began on May 5, you will find that buyers are now trying to break the upper trend line of this channel:
The volumes are large but since December 24, they have started to fall. Consequently, there is a great chance of rebounding from the current price zone to $100-$112. This can be a good check of buyers, whether they are ready to keep the price to continue growth. If buyers keep this range I will wait for the breakdown of the trend line and the price range of $140-$160, with a maximum target of $245:
In these prices concentrated a great deal of liquidity and I’m not sure that buyers will be able to go up without a stop.
The second scenario is the breakdown of the price range $140-$160, but with this scenario, there is a risk of continuation of the coin fall after the $145 test as it was witnessed in April 2018:
The irreversible growth in the bear market without a good set of positions may also dramatically change into a fall.
Buyers corrected the fall from November 8 by 50%
According to the wave analysis, if the fall on May 5th is considered the latest wave of global growth correction, then buyers have not corrected this decline by 23.6%
Therefore, the prospect of growth remains. But we must not forget that so far we continue to be in a bearish trend, even if buyers can break through $140-$160:
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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.