In my last post on the BTC market, we noted that price action had been rejected at the fourth test (4) of the rising pink . After analyzing the BTC chart structure, I proposed the possibility of a developing pattern (shown in green.) As you can see, BTC has tumbled lower, in a way that is consistent with a developing right shoulder. We can see that it is beginning to penetrate the 50 (in orange) so there will probably be further downside. While I was determining a likely low point for the proposed right shoulder, I noticed that there is a rising through the pattern (dashed grey ). I don't normally like that cut through price action, but the dashed worked well as support for the left shoulder, and parts of the head, so I decided to use it. The 38.2% retrace, and 200 (in purple) also correspond with that general area. Technically, BTC could fall all the way to the 50% retrace (Critical ) and the we could still have a valid pattern. However, the bulls absolutely DO NOT want to lose that critical support. Trading below that would likely trigger panic selling, and it would certainly negate the proposed pattern. Ideally, the bulls would like to see the right shoulder fill, as price action begins to round back to the upside, to retest the rising pink . At the moment, there is no sign of that happening. Price is steadily falling, and the is showing expanding sell-side momentum. I will keep you posted, as the chart develops.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***