Nikita Semov, a practicing trader and founder of the Crypto Mentors project, tells about the current market situation.
History on charts tends to repeat itself. A scenario played out in the past does not guarantee an absolute repeat, but it increases the probability of events developing similarly.
The high may be reached by September 2021. It could be $300,000, based on historical data.
The task of traders is to trade the real picture on the chart and the facts. Such fractals should be taken into consideration, but do not build your strategy of behavior on them.
In Price Action, there is a concept of “price projection.” It implies that the size of the current wave (without any signs of attenuation) will be similar to the previous wave size. This means that you can expect a significant price increase based on historical data.
The spread of the past week is small in size, although it fits into the average matrix. All sales efforts in this wave are insignificant. The volume is growing towards the level and is large in the matrix, although it is very weak in combination with the previous approach (186k vs. 71k). Progress from the horizontal is weak.
There is no correlation between the spread and the volume. We can expect an upward bar. According to Japanese candles, the “umbrella” model is formed, the expectation is similar.
Such current squeezes are common not only for cryptocurrency markets but also for traditional ones. “BUN” -this is the name of this sales inefficiency in the VSA analysis methodology. It can often be found on American stocks, even the first echelon.
A preload is formed to the historical maximum level with the formation of a liquidity pool in the EPS format and a false move down. There is a fairly high probability of a breakdown of the $20,000 level with further consolidation and a hike below. There is no bear initiative, as there should be no renewal of the offer at the Creek level.
Analysis of the horizontal and Delta
Let’s analyze the situation locally. The attempt to overcome the ATH was accompanied by inefficiency and retention by limit orders, after which we did not overcome the zero point . This is serious resistance.
The current squeeze was caused, as usual, by a lack of liquidity and the desire of some holders to break even on their positions since 2017 finally. Nevertheless, the price fell on vital supports in the form of a volume array. Given the current reaction, the probability of a breakdown of these values is low. It is important to monitor the 18000 levels .
OI helps us find out that again, everyone massively closed their positions on the current fall and did not “flip” into short positions. The situation is likely to be similar to that observed on November 27 .
We can expect an update of the local maximum in December if the market does not provide new introductory information.