Bitcoin | Selling and Buying pressure. Provided by Candlesticks
In this idea we will figure out why this exact Trading Range has been formed. Candlesticks will help us with this.
Candlesticks, as you know, can reflect the market psycology and points of interests, where people have the most willingness to buy or sell the asset. Despite we can find the points of interests and see the psycology, it is very difficult to determine how price will behave itself in the future, because the psycology can be interpreted in many ways (frequent human error: is thinking that he/she is playing against the majority. In the market there is no left and right. Market psycology is not static, it is dynamic and changing. Which means you can be right this minute and wrong the next one, or even half-right.)
Before we go further I have to explain what is a candlestick with the most buying/selling pressure. It is simple, because the difference between these candles and the usual ones is obvious, these candlesticks are usually long in height, and have longer bodies in comparison with usual candles. This is because more buying/selling occured and more volumes came in or out of the market in a zone, where candlestick has been formed.
This type of candlesticks can form strong resistance/support levels, and strong zones for the price to get through them.
Also these candlesticks form points and zones of interests (and psycological barriers). This happens, because to break through these levels or zones will be harder for the price and usually takes longer time. That's why market participants become more active when the price get into or go through these levels or zones.
Despite we know on which levels or zones the most activeness potentially will be, we can't define the next possible direction. You only can use these candles for determing strong zones and levels.
On the chart I marked five candles of this type. One of them I used as an example just to show you how strong it can be. Look at the bearish candlestick which opened at $12.927 and closed at $11.159 level. This candlestick formed during an Uptrend and changed the Market's tendency. It does not mean that this candle reversed the Trend, but this candlestick created a very strong resistance zone. And you can see on the Chart, that since this candlestick has been formed, the price was unable to get higher than the candlestick's high and trend started to get weakening. Also the high of this candlestick served as a psycological barrier, we saw two times when price was approaching to this level and dropped. This is because unlucky buyers who intitiated their positions on highest levels during an Uptrend sold their assets at a breakeven point or in a little loss. After first drop, this level has become a psycological barrier for them. My recommendation to you: always watch for these zones, because they compose a very important part of the market.
Sorry for such long explanation. Now let's start the analysis
On the Chart we see strong $8.500 resistance and $7.800 support levels that have been formed by two candlesticks, first one with the most selling pressure and second one with the most buying pressure. As have been said above these levels also can serve as the points of interests. Let's consider two options 1st - the price will break Upward, 2nd - the price will break Downward. And before we make some assumptions, it is very important to know the current Mid Term trend. According to some of my previous ideas the current Mid Term trend is downtrend, I recommend you to read my previous analyzes where I explained why I think so, after this idea. Back to the options:
1st option - we break current resistance and move upward - because we are in a Downtrend, the most important for this option is to watch the behavior of the price and not to be caught in the bull trap. It might happen if you will think the current Trend reversed on an Uptrend. Don not think so until two things happen
1 - the Price will get higher the $9.700 level, which is the high of a candlestick with the most selling pressure, and also serves as a psychological barrier.
2 - the Price will get higher the $13.350, which is the high of a candlestick with the most selling pressure, and serves as a second psychological barrier.
These levels are very strong, and I explained above why and gave the example. Watch them!
2nd option - we break through the support and move downward, this option conforms the trend, but might keep some surprises you should be aware with. These surprises might happen, if market will get the new buyers who will be ready to buy BTC for lower prices, when the price will decline. Watch for the volumes which will come in the Market and for some metrics on On-Chain analysis (for example how many BTC wallets with balances more than 1000 Bitcoin have been registered :) )
I would say these are main options, that seem the most reasonable to me in conditions we have now (my subjective opinion), but there are much more options, and market might find new buyers or sellers on different zones/levels of interests, because as I said above Market is not static.
Hope this information has been useful to you and you will be able to turn it into profitable information. If so please hit the like button and follow this channel in order not to miss new ideas.
Also share your charts below, give your opinion on this idea and your own thoughts about Bitcoin.
Remember this analysis is not 100% accurate. No single analysis is. To make a decision follow your own thoughts.
The information given is not a Financial Advise.
Candlesticks, as you know, can reflect the market psycology and points of interests, where people have the most willingness to buy or sell the asset. Despite we can find the points of interests and see the psycology, it is very difficult to determine how price will behave itself in the future, because the psycology can be interpreted in many ways (frequent human error: is thinking that he/she is playing against the majority. In the market there is no left and right. Market psycology is not static, it is dynamic and changing. Which means you can be right this minute and wrong the next one, or even half-right.)
Before we go further I have to explain what is a candlestick with the most buying/selling pressure. It is simple, because the difference between these candles and the usual ones is obvious, these candlesticks are usually long in height, and have longer bodies in comparison with usual candles. This is because more buying/selling occured and more volumes came in or out of the market in a zone, where candlestick has been formed.
This type of candlesticks can form strong resistance/support levels, and strong zones for the price to get through them.
Also these candlesticks form points and zones of interests (and psycological barriers). This happens, because to break through these levels or zones will be harder for the price and usually takes longer time. That's why market participants become more active when the price get into or go through these levels or zones.
Despite we know on which levels or zones the most activeness potentially will be, we can't define the next possible direction. You only can use these candles for determing strong zones and levels.
On the chart I marked five candles of this type. One of them I used as an example just to show you how strong it can be. Look at the bearish candlestick which opened at $12.927 and closed at $11.159 level. This candlestick formed during an Uptrend and changed the Market's tendency. It does not mean that this candle reversed the Trend, but this candlestick created a very strong resistance zone. And you can see on the Chart, that since this candlestick has been formed, the price was unable to get higher than the candlestick's high and trend started to get weakening. Also the high of this candlestick served as a psycological barrier, we saw two times when price was approaching to this level and dropped. This is because unlucky buyers who intitiated their positions on highest levels during an Uptrend sold their assets at a breakeven point or in a little loss. After first drop, this level has become a psycological barrier for them. My recommendation to you: always watch for these zones, because they compose a very important part of the market.
Sorry for such long explanation. Now let's start the analysis
On the Chart we see strong $8.500 resistance and $7.800 support levels that have been formed by two candlesticks, first one with the most selling pressure and second one with the most buying pressure. As have been said above these levels also can serve as the points of interests. Let's consider two options 1st - the price will break Upward, 2nd - the price will break Downward. And before we make some assumptions, it is very important to know the current Mid Term trend. According to some of my previous ideas the current Mid Term trend is downtrend, I recommend you to read my previous analyzes where I explained why I think so, after this idea. Back to the options:
1st option - we break current resistance and move upward - because we are in a Downtrend, the most important for this option is to watch the behavior of the price and not to be caught in the bull trap. It might happen if you will think the current Trend reversed on an Uptrend. Don not think so until two things happen
1 - the Price will get higher the $9.700 level, which is the high of a candlestick with the most selling pressure, and also serves as a psychological barrier.
2 - the Price will get higher the $13.350, which is the high of a candlestick with the most selling pressure, and serves as a second psychological barrier.
These levels are very strong, and I explained above why and gave the example. Watch them!
2nd option - we break through the support and move downward, this option conforms the trend, but might keep some surprises you should be aware with. These surprises might happen, if market will get the new buyers who will be ready to buy BTC for lower prices, when the price will decline. Watch for the volumes which will come in the Market and for some metrics on On-Chain analysis (for example how many BTC wallets with balances more than 1000 Bitcoin have been registered :) )
I would say these are main options, that seem the most reasonable to me in conditions we have now (my subjective opinion), but there are much more options, and market might find new buyers or sellers on different zones/levels of interests, because as I said above Market is not static.
Hope this information has been useful to you and you will be able to turn it into profitable information. If so please hit the like button and follow this channel in order not to miss new ideas.
Also share your charts below, give your opinion on this idea and your own thoughts about Bitcoin.
Remember this analysis is not 100% accurate. No single analysis is. To make a decision follow your own thoughts.
The information given is not a Financial Advise.
