The period of January 2021-current has been quite an exercise in both patience and market dynamics. We now sit at the price (~38000) that we did in January 2021, May 2021, September 2021, and January, Februrary, March, April, and May 2022. In fact, 38000 is where the most volume (otherwise known as buyers and sellers transacting) has taken place.
The implication of this volume swell at this price is that it is both an area of significance and a pivot for market direction. From the game theory perspective, buyers and sellers both have the most to lose/gain upon a movement from this area – and the time spent at it is a reflection of grand indecision. Neither buyers nor sellers have had a large amount of conviction that has translated to a meaningful trend all of 2022 – and this is likely the result of the macroeconomic backdrop that looms over all markets currently.
The time spent here is approaching the high range of how long BTC normally consolidates before a 10-20% trending move, and this move is more than likely less than 2 weeks away. The LF strategy has been relatively slow because of the compressing volatility, so any move out of this range of 38-42k would be a benefit and exciting add to volatility. Below 38k will likely lead to a drastic move down.
The most likely scenario currently is the downside as long as we remain below 44k. Selling pressure has been present since the strong rejection at 48k and buyers have been stagnant. The market will likely look for more liquidity at lower prices such as 28k or attempt a sort of rounded accumulation bottom in the region between 30-38k.