Reading time: ~2 m
Forecasts of financial markets are the private opinion of their authors. The current analysis is not a guide to trading. ForkLog is not responsible for the results of the work that may occur when using the trading recommendations from the reviews provided.
Nikita Semov, a practicing trader and founder of the Crypto Mentors project, talks about the current situation on the market.
This week, bitcoin showed a false breakdown, testing the key $38,800 level. Let’s analyze the direction of the current trend and assess the risks of a further decline to the main demand level.
On January 26, the price reached an important supply level of $38,800 formed by a large cluster volume. The fact that the price has shown a rejection of these locally high levels with a strong reaction from the sellers, indicates a high potential for further decline in quotations.
A return under $37,000 completed the “false breakdown” pattern of the volume level VAH and according to statistics, the expectation is built from reaching the lower limit, which is at $31,500. Intermediate support levels will be $34,000 and $32,900, with a breakdown and reverse test of which shorts can be considered.
An additional confirmation is the Absorption pattern in the cumulative delta. It reflects the absorption of all demand by limit orders to sell. In the current market situation, there is a large seller on the market who does not let the quote go higher.
#trader #assessed #likelihood #decline #price #bitcoin
