BTC has broken its short term timeframe wedge pattern indicating a potential test of the larger timeframe wedge pattern which coincides with previous lows (3100-3200).
From a mathematical perspective and using the monthly Bvol (from Bitmex) to calculate the weekly 1 and 2 standard deviation expected moves, the levels show the following;
1 standard deviation down = 3225
1 standard deviation up = 3620
2 standard deviation down = 3005
2 standard deviation up = 3825
Summary;
There are 4 levels of confluence down at the previous area low of 3100-3200 which creates a strong ad plausible reasoning to look at short term long positions for a move back unto the circa 3700 level if we get down to them. For confluence we have the following; previous lows, longer term wedge support, 1 standard deviation downside move (protected 84% of the time) and good size bid orders lined up. If prices overshoot to the downside which can sometimes happen I would be looking at a 3k test, this lines up with the largest order book bid wall (until the 1-1.3k level) as well as the weekly 2 standard deviation level (protected 95% of the time).
On a longer term timeframe, I am bearish to the 1-1.5k level. Here we see the largest bid walls which is where we see market makers pricing in a better risk to reward for longs.
From a mathematical perspective and using the monthly Bvol (from Bitmex) to calculate the weekly 1 and 2 standard deviation expected moves, the levels show the following;
1 standard deviation down = 3225
1 standard deviation up = 3620
2 standard deviation down = 3005
2 standard deviation up = 3825
Summary;
There are 4 levels of confluence down at the previous area low of 3100-3200 which creates a strong ad plausible reasoning to look at short term long positions for a move back unto the circa 3700 level if we get down to them. For confluence we have the following; previous lows, longer term wedge support, 1 standard deviation downside move (protected 84% of the time) and good size bid orders lined up. If prices overshoot to the downside which can sometimes happen I would be looking at a 3k test, this lines up with the largest order book bid wall (until the 1-1.3k level) as well as the weekly 2 standard deviation level (protected 95% of the time).
On a longer term timeframe, I am bearish to the 1-1.5k level. Here we see the largest bid walls which is where we see market makers pricing in a better risk to reward for longs.