Following a consolidation, a break of the recent structure low invited price to revisit prior lows, as price action continues to roll down.
Predictive analysis and forecasting has defined the following probable levels of support:
1 - 438.82, moderate probability of offering support/reversal
2 - 425.37, high probability of offering support/reversal
3 - 384.65, low probability of offering support/reversal
A breach of 425.37 could open the floor up to a new structure low. In such case, then look for a technical at 400.00, or a rescue pattern support ( ) at 384.65.
Bears remain dominant and are likely to drive price lower. I have offered above a rating of probable support/reversal levels, which are mere suggestion, much like a rope on a fixed stick, which the concerned bull might consider to clasp while its hooves continue to sink in this quick sand. A structure low at 400.00 might help this market wring out all of the stop-losses in the field, whereas institutional influx could emerge in the 400.00/384.64 range, on the basis that fundamental news has not discredited crypto-currencies, but instead has carved out newly and expensive laws that are sure to rid of unmotivated investors, while price action is taking care to wash out all of the weak hands.
Predictive Analysis and Forecasting
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This range could either be the 438/408 which I defined in the chart, or the 425/384, also defined therein, corresponding to absorption of retail positions by institutional volition, taking on intelligent position to the upside.
Another characteristic of my Volume Type 1/2 observation is that it can happen under two timely circumstances: 1) A narrow event, where both volumes are closely associated to one another, or 2) two distinct volume spikes distanced from another by narrow level of retail activity.
In the first case, one should seek a marubozu or twizzer bottom candle morphologies, while in the second case, a pinbar at the second counter-trend candle would be most characteristic.
This are not hard and fast rules, but ones that may help provide added rational layering over the forecast levels I just defined for you.
Hope this helps and does not dim the light any further than institutional traders might intent.
David Alcindor, MOD
Besides the plethora of candle formation education out there, I would also looking into volume spread analysis, which is a whole lot more complicated than this "1-2 Punch" observation I defined above, although it has helped me identify and confirm bottom/top reversals as adjunct methods to my predictive analysis and forecasting system.
Here are some reference worth looking into look:
1 - Neil Fuller's pinbar concept of trading only through price action:
2 - Gavin Holme's free weekly introductory seminars on Volume Spread Analysis, or "VSA".
3 - And finally, for the advanced trader, here is my favorite professional trader: Constance Brown who wrote very important work: