There's a lot of confusion right now about what's going to happen: bottom the short-term future is hard to predict. We offer here one shoddy explanation. Be weary and use with caution.
NOTE: I've factored in other exchanges' price data into this drawing. That's why I don't use the exact points on the chart.
There are a lot of problems with this triangle (so no promises here). There are also a lot of supporting facts. I'll run through both quickly.
- It's a pretty textbook perfect triangle:
.... All the fibs line up, in both height AND time.
.... The descends neatly, spikes on wave D, then decreases on E.
.... Every wave is a with the exception of a complex wave C.
- Triangle is consistent with the overall psychological "mood" of the moment: confusion and uncertainty.
- This triangle is indicative of a downward movement in price. This is consistent with the recent spike: every time there's been a news event (usually positive) that goes against the trend (usually down), there's been a brief spike up and then resumption of the downward trend.
- If you use Huobi chart data alone, you would find a clear DESCENDING/BEAR triangle. (Some people are inclined to think Huobi is the best indicator of movement.. and that okcoin lied about its and shouldn't be trusted.)
- This triangle does not fit in with the larger timeframe . (We couldn't agree on any wave setup for the higher timeframe.
- The triangle doesn't fit (at all) on some of the USD exchanges.
- We may be seeing a triangle because we're biased to look for them, when in reality there's nothing there.
- The traditional represents a trend change. (An triangle /basically/ means a continuation.) Traditional triangles are usually much bigger (ie February-March of this year), but since this triangle doesn't appear to fit into an , it could mean reversal.
- Traditionally, the E wave of the triangle is traditionally a bit of a fucker. Sometimes it fakes a breakout. Sometimes its behavior defies explanation (ie lingering around the upper resistance of the triangle).
- It could possibly turn out to be a 9-wave triangle. Given the high retracements (78.6 - 88.6%), its curvature makes it quite long. (Normally triangles end around 66-75% of their time-length.)
EDIT: I forgot a fib level for wave D! It hits 0.886 on the nose.