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During this rally upwards, the price has made important higher highs on the price action structure. It has made short-term HH's & HL's and higher timeframe HH's.
We fought heavily with the $4,000 level. Multiple attempts to break higher than $4,100 and lower than $4,000. We got signs from the higher timeframes and the price did a breakout downwards from the triangle and it got a candle close below the $4,000. This move guides the price downwards around $3,760, currently, we can say that this is short-term higher low but I think we might see a bounce downwards from the current level at $3,900.
This area just below the $4,000 is very strong. Like I said before we had several attempts to break lower than $4,000 but the price got rejections from $3,950. Now, when the price is lower than this level then it starts to work as a resistance - just a simple role reversal.
If it finds resistance from the current area (around $3,900-$3,950) then there would be perfect right and left shoulders on the chart pattern called "Head & Shoulders". This pattern will guide us to the major bounce area around the blue area (green circle). The price range for that bounce area would be between $3,530-$3,635.
The bounce area is a well known strong area, statistic wise 20 attempts to break through and only 2 of them were successful. Now I think if we reach into this area we will see a bounce if something strange doesn't happen at the same time.
The bounce area criteria at $3,530-$3,635:
1. The trend is Your friend and the short-term trend is so, we would like to search some setups.
2. The super strong price level starts to work as strong support (blue area)
3. ABC throwback would be perfect endpoint from the top to make another leg upwards.
4. Different FIB levels inside the green circle and yes, the golden ratio 62% retracement level is also on the circle.
5. In my opinion, one of the best Harmonic chart pattern Chypher (which will be easily a continuation pattern) endpoint is on the circle!
6. Different timeframe EMA's should act as support levels.
7. If we got a rejection from the mentioned area and this setup ends with a bullish pattern, then it would be seventh confirmation!
Currently, we got just an hour ago a little pump upwards with the altcoins support but still, I believe, if You want to get a perfect entry point I would suggest to watch this area!
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*This information is not a recommendation to buy or sell. It is to be used for educational purposes only!
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