When the price moves below the 23200 level, it is easy to notice red clusters and a general negative delta on the vertical bar (indicated by number 1).
However, there was a restoration on the next candle. The spike in the negative delta was driven by panic selling activity and/or by triggering buyers’ stop-losses. Anyway, these sells do not provide any arguments that sellers have power and control over the market.
When an intermediate top formed around 23350, there was a decrease and another crossing of the 23200 level. However, the volumes were low for the second time, so we do not see panic or vast spikes of delta.
How to interpret such a picture?
In our opinion, there was a test of panic selling. The first candle triggered sellers’ activity which was “absorbed” by buyers. Major traders were probably among them and they knew that 23200 is a good price to buy bitcoin. Intentionally or not, they used a spike in panic selling to go long on their account expecting a rise.
Candle number 2 could be a test of panic selling. The minimum and maximum of the candle were below the previous 2-3 candles. At 04:30 we observe a feeble attempt to decrease. Low volumes revealed that sellers were passive. Everyone who wanted to sell had already done it. The buyer received confirmation of their rightness.
In other words, the analysis of volumes shows the capitulation of sellers. The buyer accumulated long at their expense and, thanks to the test, received actual confirmation that the job was done. The supply was exhausted and the market had more chances to rise intraday or positionally.