The daily chart for Bitcoin on TradingView continues to remain firmly anchored within the spread of the volatility candle of the 19th May which saw the cryptocurrency fall heavily under the extreme volume of selling, only for the price to recover during the session and close with a deep wick to the lower body and signaling the reversal on equally strong buying. The volatility trigger appears on a move outside the average true range for the instrument and as such we can expect one of two things to occur, either congestion or a full reversal. What is interesting following such dramatic events is to note the volume which follows, particularly on any down candles, and here we can see two significant events. First, on the 23rd of May, we saw further buying in a repeat of the price action, with a move lower duly reversed on high volume and confirmation of further buying. This is the ‘mopping up’ process which we expect to witness following such dramatic moves where it takes time to absorb the selling pressure which is the case here. Second, note how this is dying away and areas that have seen high volumes of selling in the past are now relatively low confirming the selling pressure has been absorbed by the buyers with yesterday’s wide-spread up candle on excellent volume a good example. Here we have price and volume in agreement so all is well. Longer-term, the two levels defined by the volatility candle are now key with the ceiling at 44,000 and the floor at 30,000. A wide range but nevertheless important and once one of these is breached this will open the way to a longer-term trend developing in due course.
NB – I have deliberately not included the volume point of control on this chart but I can confirm it is currently sitting at the current price action and will include it in my next post.
By Anna Coulling
Charts from TradingView and indicators from Quantum Trading
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