Bitcoin : the teachings of the volume on finding the low point

In my previous technical post, I reviewed the downside risk for cryptocurrencies of a rebound in the US dollar against a basket of major currencies.

Effectively, the US dollar has been rebounding for a week and this fundamental factor played its part in the correction of cryptos, but it is above all the sell-off of the Nasdaq star stocks that has hit the cryptocurrency market.

Does the Volume Profile reveal another wave of correction?

Since its highs on August 17, Bitcoin’s price has lost more than 20%, taking altcoins with it. The market has stabilized for five sessions on the $ 10,000 and it is working a price area that can be seen as the technical abyss.

To be precise, it is the support at $ 9,933 that holds the shock, it is the opening price of the bullish technical breakout session of July 27th. But the market is again covered by resistance at $ 10,500, the old highs of February 2020, it is the resolution of this trading range, $ 10,000 / $ 10,500 that will allow us to know if the market returns to its underlying uptrend or sinks as in last March.

Remember also the presence of a bullish gap, partially filled, on the BTC future contract between $ 9,665 and $ 9,925. The filling of the gap can take place in full, but you should in no case close below under penalty of exposing yourself to a market stall.

To stop the correction, you have to break through an appropriate resistance and that is $ 10,500, and you have to do it on the basis of a daily closing price.

Finally, below you have a chart that shows the volume structure (Volume Profile) between the March low point at $ 3,850 and the summer high point at $ 12,325. The massive exposure area for traders is between $ 9,000 and $ 10,000, which is the edge of the technical abyss.

Chart showing the daily Japanese Bitcoin (BTC) candles with Volume Profile – Source: TradingView

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About the Author : Vincent Ganne

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Vincent Ganne is both a manager at TradingView, a market strategist, technical analyst, trainer on the stock market and speaker on BFM Business. With a long experience in the field of analysis, he offers a global approach to financial markets. From a macroeconomic point of view, as well as from a microeconomic point of view. Vincent Ganne also uses many aspects of graphical analysis with the aim of forecasting trends in financial assets over the medium and long term.
All articles by Vincent Ganne.