Bitcoin - detailed Analysis of Volume & Price Action - CryptBRO
Let's start just from a volume perspective without any significant price action Level.
1.
Volume profile of visible range:
Ond the right side we see volume bars which gives us a visualization on which level much volume was traded. The most traded volume level is the point of control (red line; biggest bar).
The point of controll gives us a bias. (Below POC = bearish bias vice verca)
The week closes BELOW the POC which increases the porbability that bitcoin will test prices below current price.
1.
Volume profile of visible range:
Ond the right side we see volume bars which gives us a visualization on which level much volume was traded. The most traded volume level is the point of control (red line; biggest bar).
The point of controll gives us a bias. (Below POC = bearish bias vice verca)
The week closes BELOW the POC which increases the porbability that bitcoin will test prices below current price.
Comment:
3. volume profile of certain timeframe interval
Let's take a look at the volume profile for the price action from this weekend. i use the 4h timeframe in this example.
We can clearly see that the price is RANGING within the VAL (value area lows) and VAH(value area highs) (the end of the VAL and VAH is when the colour get more transparent) .
THIS means that price has not choose a direction yet which why a long/short from this level is not high probability because price can go either way. BUT what we can assume is that as soon as price accept one direction form this range the move will be powerful. (the longer the consolidation the stronger the move).
In combination with our VAL/VAH level of the overall Range that i explained at the beginning of this analysis price our short trigger lvl (which is the Value area low (VAL of the overall range) is now even more significant.
Let's take a look at the volume profile for the price action from this weekend. i use the 4h timeframe in this example.
We can clearly see that the price is RANGING within the VAL (value area lows) and VAH(value area highs) (the end of the VAL and VAH is when the colour get more transparent) .
THIS means that price has not choose a direction yet which why a long/short from this level is not high probability because price can go either way. BUT what we can assume is that as soon as price accept one direction form this range the move will be powerful. (the longer the consolidation the stronger the move).
In combination with our VAL/VAH level of the overall Range that i explained at the beginning of this analysis price our short trigger lvl (which is the Value area low (VAL of the overall range) is now even more significant.
Comment:
4. Liquidity analysis of current range
within a sideways movement, the price is driven by liquidity movements. as soon as a level is reached where many stop loss orders or liquidation levels lie we can most of the time volatile price action.
keeping in mind that the price is not trending, after reaching a price level of high liquidity, the price should lead to the next level of high liquidity. in a range environment, this is usually the other side of the range (in this example to the upside)
This is because many people jump into a short position on a down move and anticipate trend continuation. This kind of thinking creates a lot of liquidity at the previous swing high, where the traders with short positions have their stop loss orders.
within a sideways movement, the price is driven by liquidity movements. as soon as a level is reached where many stop loss orders or liquidation levels lie we can most of the time volatile price action.
keeping in mind that the price is not trending, after reaching a price level of high liquidity, the price should lead to the next level of high liquidity. in a range environment, this is usually the other side of the range (in this example to the upside)
This is because many people jump into a short position on a down move and anticipate trend continuation. This kind of thinking creates a lot of liquidity at the previous swing high, where the traders with short positions have their stop loss orders.
Comment:
5. price anticipation
with all context in mind i think price will hunt the liquidity above that range level (green) and will go down afterwards. in overall context price did already test the VAL several times (the more a level gets tested the weaker it is). Todays weekly close closes below the point of control (most trade volume bar) which gives confluence for bearish bias.
+ The liquidity around 28k was not tested yet.
As soon as price falls below VAL level of overall range and holds below this should give a high probability short set up to 28k area.
with all context in mind i think price will hunt the liquidity above that range level (green) and will go down afterwards. in overall context price did already test the VAL several times (the more a level gets tested the weaker it is). Todays weekly close closes below the point of control (most trade volume bar) which gives confluence for bearish bias.
+ The liquidity around 28k was not tested yet.
As soon as price falls below VAL level of overall range and holds below this should give a high probability short set up to 28k area.
Comment:
6. weekly candle stick
this weekly close is bearish.
price closed below previous weeks candle body. if we sum up this weekly candle with the previous weekly candle the price already engulfs the all time high weekly candle.
this weekly close is bearish.
price closed below previous weeks candle body. if we sum up this weekly candle with the previous weekly candle the price already engulfs the all time high weekly candle.
Comment:
7. Supply & demand perspective
from a supply & demand perspective price is on the brink to lose an important level (middle supply/resistance lvl). It looks like a turnaround point from one phase into the other.
important to note is that the supply/resistance block that led to all time high acted as previous support (price firsts attempt led to bounce). On the second attempt price CLOSED below that supply/resistance zone which tells us price strength is decreasing!
as long as price does not close above that zone again i interpret this consolidation (blue box) as bearish and price should visit lower demand zones.
from a supply & demand perspective price is on the brink to lose an important level (middle supply/resistance lvl). It looks like a turnaround point from one phase into the other.
important to note is that the supply/resistance block that led to all time high acted as previous support (price firsts attempt led to bounce). On the second attempt price CLOSED below that supply/resistance zone which tells us price strength is decreasing!
as long as price does not close above that zone again i interpret this consolidation (blue box) as bearish and price should visit lower demand zones.
Comment:
8. Moving Averages
From a Moving Averages point of view we have the first BEARISH 10/20 MA Cross. After a Bearish MA Cross price visits either the closed Moving Average below(in this case 50MA) or the previous lost Moving Averages catch up with price by consolidating.
In out Bitcoin example price hit the 50MA supports and gets down pressure by 10/20 MA. the more negative the angle of the MAs the more down pressure we can assume.
With this principle in mind we can combine this view with our previous analysed points. THE 100MA acts as support with confluence of demand zones + VALUE AREA LOW of overall range.
IF Price loses 28k price will hit 22k with high probability.
Summarized. PRICE NEEDS to hold the 28k level. OTHERWISE we will see 22k very soon. They only bullish case would be that price wicks into 28k to hunt the liquidity below the hammer candle that led to all time high and bounces back up above the lost supply/resistance zones (Confluence with 10/20MA catching up). THIS would form a valid double bottom and longs are safe.
From a Moving Averages point of view we have the first BEARISH 10/20 MA Cross. After a Bearish MA Cross price visits either the closed Moving Average below(in this case 50MA) or the previous lost Moving Averages catch up with price by consolidating.
In out Bitcoin example price hit the 50MA supports and gets down pressure by 10/20 MA. the more negative the angle of the MAs the more down pressure we can assume.
With this principle in mind we can combine this view with our previous analysed points. THE 100MA acts as support with confluence of demand zones + VALUE AREA LOW of overall range.
IF Price loses 28k price will hit 22k with high probability.
Summarized. PRICE NEEDS to hold the 28k level. OTHERWISE we will see 22k very soon. They only bullish case would be that price wicks into 28k to hunt the liquidity below the hammer candle that led to all time high and bounces back up above the lost supply/resistance zones (Confluence with 10/20MA catching up). THIS would form a valid double bottom and longs are safe.
volume profile and its VAL/VAAH:
the value area is the area in which the trading volume was the highest. (point control is the highes volume node WITHIN this value area)
VAL and VAH act as significant support and resistance level. Both level will give us confluence for our bias in this analysis.
FOT now price is trading within Value Area BUT tested the VAL already several tests.
i doubt it that an other test of the VAL will hold which gives us a trigger level to short this asset to lower level. JUST from a volume perspective. Powerful.