Our view is that Bitcoin has ended its parabolic rise, and will likely soon correct some 20% in a rapid selloff.
Our reasoning is simple: as outlined in our previous post, markets typically form wedges before the exhaustion of a bullish wave to indicate a shift in momentum is occurring. This is precisely what happened here; the ascending triangle outlined with the black lines broke to the upside, as most ascending triangles do, but the presence of the triangle itself is a bearish signal for the medium term.
Intermediately experienced swing traders, euphoric from the quick profits they accumulated from the formation of a clear buy signal (the ascending wedge), are likely to play the current market cautiously. These are the traders who control the market; they sell high and buy low. That means they will either take profits, or, expecting a further run up, hold on to their positions with stop losses concentrated in the range of the ascending triangle.
The implications of this are as follows: after the profit-takers initiate the selloff, it is likely to rapidly accelerate until price reaches below the range of the ascending triangle - we have this at a price of approximately 6900 USD. None of this is to say that it isn't within the purview of this theory that price continues to stagnate somewhat, or even perhaps rallies in a last gasp; however, we don't see either as the most likely scenario. With low volatility, the market is most likely to dump big and dump soon - within the next 24 hours.
Our reasoning is simple: as outlined in our previous post, markets typically form wedges before the exhaustion of a bullish wave to indicate a shift in momentum is occurring. This is precisely what happened here; the ascending triangle outlined with the black lines broke to the upside, as most ascending triangles do, but the presence of the triangle itself is a bearish signal for the medium term.
Intermediately experienced swing traders, euphoric from the quick profits they accumulated from the formation of a clear buy signal (the ascending wedge), are likely to play the current market cautiously. These are the traders who control the market; they sell high and buy low. That means they will either take profits, or, expecting a further run up, hold on to their positions with stop losses concentrated in the range of the ascending triangle.
The implications of this are as follows: after the profit-takers initiate the selloff, it is likely to rapidly accelerate until price reaches below the range of the ascending triangle - we have this at a price of approximately 6900 USD. None of this is to say that it isn't within the purview of this theory that price continues to stagnate somewhat, or even perhaps rallies in a last gasp; however, we don't see either as the most likely scenario. With low volatility, the market is most likely to dump big and dump soon - within the next 24 hours.