BTCUSD 25 DEC 2023

A typical distribution pattern is observable, characterized by supply pressure impeding forward progress, as reflected in the interplay between effort and results. While this does not necessarily signify the demise of the investment opportunity, it may not be the most favorable long-term prospect. Notably, there is a conspicuous concentration of selling activity transpiring, indicative of shrewd investors capitalizing on profits. It would be prudent to consider realizing some gains and patiently await a reset at lower price levels. One can envision the inverse scenario for potential opportunities, although the ultimate decision rests with individual discretion.

Markets frequently necessitate periods of consolidation and lateral movement following significant volume-driven upswings, as selling pressure must dissipate before any further upward movements can materialize. It is essential to recognize that selling constitutes a form of resistance to higher prices. Professional traders employ a tactic of market "testing," wherein they deliberately drive prices lower within a given timeframe to identify whether the selling pressure has indeed abated. If this maneuver succeeds, traders can confidently ascertain the conditions for further action.

Read page 39 of the textbook "Mastering the Markets" for an academic explanation of the principle of effort versus result.