Bitcoin Market Analysis 27nd January 2019

It’s time to sum up the weekly trade and forecast a probable scenario of events for next week.

After a sharp fall which was last Sunday, buyers were able to take the situation into their own hands following a slight consolidation in the price zone of $3560-$3580. The sellers tried to break through this price zone but only managed a beautiful flaw which tested $ 3462.

After that, the buyers immediately tried to organize growth and formed a channel in which the price was moving throughout the week:

However, so far this growth does not bring hope.

First of all, we do not see the big desire among buyers to buy BTC at current prices. This is confirmed by the volume of trades. It turns out that volumes during the growth attempt were mostly smaller than during consolidation:

This means, so far buyers are not ready to actively buy at the current price and are likely to continue to fall.

The second reason is the high activity of sellers at local maxima. If we analyze what’s happening at local maximum it becomes clear that sellers expect a certain price to become active:

In the first case, the chart shows that on enlarged volumes the candles are small and the price is noticeably intermitted, after which the fall begins.

In the second case it is seen that buyers forces are sufficient only for one good candle after which other market participants do not consider it as a signal to purchase, and then the volumes start falling gradually, after which the sellers start falling again.

In the third case, buyers tried to show aggression and immediately received the same aggression in response from sellers. It is clearly visible both on candles and on volumes.

The third reason is very deep correction. The impression is that it is very difficult for buyers to keep a price on the local growth channel. For good growth, buyers with great enthusiasm should redeem all corrections down. Please note how the price was moving briskly from January 13 to 19 and how its attempts to grow last week looks like:

Buyers did not react very much to last week’s growth attempts. It is confirmed by the chart of their margin positions:

After the first unsuccessful growth attempt, marginal buyers’ positions were very lazily responding to all other growth attempts. However, during the fall, buyers sharply closed their positions. This indicates that buyers do not believe in growth at the moment and are ready to continue to close their positions, if the price starts to fall further on the longer timeframe there is still a prospect of closing their positions:

Sellers, on the contrary, actively increased their positions throughout the week which may mean that they believe in the continuation of the fall:

Therefore, we conclude that the majority of market participants expect the continuation of the fall.

According to the wave analysis, last week’s growth in its structure looks like a correction after the fall on January 19th:

On a larger timeframe, to complete the correction that began after the growth on December 17 is lacking another falling wave. After that buyers should activate if they intend to continue to grow:

Therefore, locally, we expect a continuation of the fall in the price zone of $3260-$3360, from which we expect a continuation of growth with the ultimate goal of $5150. The critical point in our main scenario is $4000. At this point, large volumes are concentrated and it will be a great indicator that will show how strong the buyers are to continue moving on. In addition, at this price is the trend line of the falling channel, in which the price is traded since November 2018 and the Fibonacci level of 61.8%:

We will consider an alternative scenario if we see that buyers do not show a desire to buy in the price zone of $3260-$3360. Follow our analysis during a week.

 

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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.

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