This trading idea has been made using the Black Flamingo indicators. Fell free to check their descriptions (in related ideas) and if you want to test them, you can PM me.
In the following, I will assume that you understand the basics of these indicators.
TL;DR: All the indicators are showing that a correction to the 8k-12k zone is necessary at this time, and we cannot continue the parabolic uptrend.
The momentum (BF trend) shows a parabolic support that have been tested many time. Also there is a divergence between the price peaks and the momentum. As we are returned in the overbought zone, there is no more fuel to continue on this momentum support, so it will likely break.
The highest winrate signal on Bf trend is a major correction when a parabolic momentum support break with a divergence. The next week is key to confirm this TA.
There is also three other signs that a major correction will happens :
- The volumes are falling continuously during the parabolic uptrend
- The context shows that we are in sell zone and ready for a correction, to return at least in a range
- We are at weekly major resistance ( ATH )
With all this arguments, I think that the most probable next move is a major correction for at least 3-6 months.
About the target of this correction, we can see on the VPVR that the is between 8k-12k.
that also corresponds with the major monthly uptrend support.
About the timing, if we refers to the length of the uptrend in the momentum (dec 18 to nov 20, so 23 months), if we are on a correction, we should correct during at least 6 months. If this is a more long term correction, that could lead to the major support, we could expect a 1 year correction.
To illustrate it, I drawed on the TA the bars of a scenario for a 1 year correction, with a breakdown of the 10k level
Finally, we can talk about what happens if this TA is not realized directly.
First, the signal on BF trend is not confirmed (so the RR of a long term short is high at this time), so we can expect a last pump high in the overbought zone, then a break of the parabolic support. this can leads to 22k-24k levels but no more. If this happens, the correction will be harder and longer because the spring on the momentum would have been pulled too hard.
Seeing this TA, I think that the chances that we will front run without a major correction to 30-50k or more is near 0%.
thank you for your reading, and feel free to comment or ask me questions :)