Market Pressure

Whether the market is trending or in a period of ranging, pressure will almost always be building up at either recent market highs or lows. A typical pattern of a buildup of market pressure to watch out for is that of flat range lows and declining range highs (bearish) and that of flat range highs and rising range lows (bullish). 

 

These patterns are good to look out for due to their high probability of success and the price action that can occur after such a move. 

 

Strong market pressure will also reveal itself as increasing/large volume in one direction with not much volume transacted when price moves in the other direction. 

 

 

Take a look at the repeated lows indicated by the boxed portion of the chart above. Additionally, the arrows indicate points where bearish volume was far higher than bullish volume. This is a great example of what strong bearish pressure looks like. Repeated touches of support indicates the strength of sellers’ ability to keep the majority of transactions near market lows.

 

Selling a fair amount of your BTC holdings in order to buy back lower would have been a great play as BTC ended up bottoming out 30% lower than this range within the same month. 

 

However, bearish or bullish pressure does not make it a certainty that price will rise or fall. Always be prepared for market variability, as the market runs on probabilities and never on certainties.

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