I'm excited to provide this update, because I have been waiting for days for confirmation of what we just saw happen today. Bitcoin has touched down on the magical Big Red fib circle boundary, and I think this is a critical pivotal point. We had many prognosticators calling for a breakout of the previous pennant formation that ended on or around August 10th. But I wasn't quite in agreement due to the fact that my experience with pennants is that they break to the down-side when we are trading within a bearish trend. But what's even more interesting is the fact that the correction has pulled the candles down to my Big Red fib line.
To review, here are the parameters that I based these fib circle boundaries upon:
3.618 Light Blue (May 23rd 2019 to June 26th 2019) Big Blue 1.618 (Nov 12th 2018 to June 26th 2019) Big Red 4.618 (July 22nd 2018 to Dec 12th 2018)
These lines have shown us several critical pivot points since I have constructed them, as if they have a gravitational pull on the Bitcoin price line. That's why I am sticking with them until we trade far enough ahead that they are out of range. Today's action brought the candles right down to the Big Red 4.618 fib circle line, and I think we will see a couple different scenarios play out at this point. First, we could bounce back up to the top of my parallel trading channel. Not many people are using this same trading channel, but again, as long as it continues to provide us with critical pivotal points, I will stick with it. But our second scenario is what I think will be the more probable result.
We might trade right down along the Big Red 4.618 line, possibly dipping down below and bouncing back up to or around the line, until we get to the next fib boundary. I think this has the higher probability because you will note that we have poked BELOW the 200-day EMA line for the first time in almost a month. Once the candles pull away from the Big Red 4.618, we do have the Light Blue 4.236 line that could attract the price action, providing a possible pivot to the up side or down side. We may dip down and back up by the time we hit that line. We could also hit the top of the trading channel one more time, and then continue the major correction.
If we blow straight sideways through the Light Blue, the Big Blue 1.618 really has my attention. I do think we will see something big happen when we reach that point. It could be a return to a bullish trend, or a confirmation of the bear market that sends us deeper, down into the abyss. There are many people talking about $7200 being a possible target, and this could definitely play out that way. $7200 is a previous support, and could end up being resistance. Some talk about $9600 being the extent of the correction, but I don't see any indication that we could have a pivot point around that area. Therefore, I'm cautiously going with the $7200 (or less) correction point.
If you want to hear the live description of this idea, please check out my CryptoPro YouTube Video here, and Like & Subscribe if you would. I would love to hear your comments and feedback. As per usual, this is not financial advice. Be careful out in this crazy market. Next time, we'll talk about the "big picture" that I eluded to in the video, where we see some evidence of further bearish movement.
@coinlife, Thank YOU for the compliment! I appreciate it!
akublashvili
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1. Red/blue/white and Rambow coloured FIB circles of death and capitulation have a very poor record of actually having any significance. They basically have meaning if you force them to have meaning.
2. Let's say you are right and they do have some significance. - They still fail to provide statistically significant resolution concerning the trend reversal or continuation.
3. Your perceived channel of death and capitulation needs to have 3 contact points on the lower side. Until this happens please don't call it a CHANNEL and don't assign to it any significance.
carltonzone
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@akublashvili, I call it like I see it, and will continue to do so. If this doesn't work for you, I respect that. "Statistically significant" is meaningless when we have things like BitFinex and Tether. Thanks for the comment though!
akublashvili
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@carltonzone, sure man. Whatever keeps you going and brings profitable trades to you.
carltonzone
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@akublashvili, It's a hobby, entertainment only. I'm definitely not an expert advisor. I love doing this for the sheer fun of it. I was an avid penny stock trader back in 1999. That's what got me started on technical analysis. I have a meager amount of money in the market, mainly XRP. I dumped all of my alts, before the Binance restriction starts, converted to USDC, and moved it to Coinbase Pro. However, I will admit that I don't trade. I let it sit for the long term. I don't have enough experience yet to risk trading the swings. Are you a swing trader? Anyhow, thanks and keep commenting. Please check out those posts if you would, and watch my YouTube video!