Bitcoin is currently showing some interesting volumes signatures across the board.
But the most significant of all is coming from Bitfinex exchange. We will look into Bitfinex books bellow.
In the macro monthly chart, we can see momentum characteristics coming out of this correction similar to those seen in the 2013 correction that took around 3 months to complete.
The market printed a local top every time the RSI hit 95% levels after a serious rally with several months of duration and we have similar ongoing momentum signature with the Signal RSI (a fast but smoothed RSI) we can see an aggressive downside extension at near 50% levels.
Price also came down to the 29-25k price levels with is important support range due to the fact of being correlated with the Quarterly Open and Previous Quarter's trading Average price.
When we see this kind of correction so fast and so aggressive. Chances are that the pullback into new highs will also be quick.
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In the picture bellow with the help of Tradinglite we can see unusual buy volumes coming out of the 4H timeframe.
Most of that significant volume are buy orders executed at the market (in green) and showing up on the lower side of the range. This is particularly interesting.
Let's zoom in and take a look a little further at the 3om timeframe for more granular view.
We can see utter concentration of organised buying activity (see circles vs volume) that seriously outperform any sell delta.
Next, I used some rectangles to zone out zones where the books show serious support and resistance, in other words, considerable concentrated liquidity.
Bitcoin produced an higher low at 34k and shown some support. There was no more effort to push it down and bounce set to test the resistance at 39-40k.
Despite the serious effort put into absorbing all the 39k resistance we see that the bid side was considerably weak YET price didn't retrace back and sustain quite nicely.
A new strong support is now being built at 38k. Be aware that this could be a trap since the lack of liquidity right under is concerning. But the way those buy volumes at 36k were generated make any price action above 36 as is still considered in bullish areas. We probably could see those orders moved and price drop to 37k only to reverse and go higher quickly in a typical bear trap fashion.
There is strong probability Bitcoin reached the bottom here. But bitcoin have still to overcome the 45-47k range to get above 50% from the ATH and recent lows.
Ideally we also don't want to see any sort of equally big sell volumes any time soon.
If we see significant selling between 45 and 50k, there is a chance to revisit the 25k range. But i see low probability for the moment.
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The weekly chart is currently showing signs of recovery. A pullback from the lower side of the cloud is set and have two main resistance levels 40k and 47k.
All price action inside these ranges is still considered 'neutral' where risk exposure should be lower or reduced. .
Overall, some early bullish signs coming out of Bitfinex but things can also change very quickly with the incoming resistances of 47k. A mechanical approach with decent risk management is always the best approach over longer term specially during periods of consolidation where price didn't break yet into new highs and show frequent sideways with tight ranges and low volumes.
I expect the Daily and Weekly trends to become bullish trading and sustain above 41k and the monthly above 50k.
These are the price levels where D7 Strategy are likely to flip bullish in their respective timeframes. Trading bellow then return to consolidation mode.