When will they ever learn?
Welcome friends, foes, traders, pro's, and the little guys who are still on their training wheels. You know, the ones who carry big megaphones and shout about how wrong I am all the time, while their positions get decimated. I guess they should have been on team Magic. Anyway, let's get right to it! Looking at the four hour BTC chart, we can clearly see that the breakdown has occurred, and BTC is now back inside of the (in pink.) With that said, I am now in full bear mode. I know that the pattern is still technically valid, but I will not go long, unless we get back above the channel, or we see a capitulation recovery on big . This is extremely price action, and technically, what we could have here is a big failed breakout of the . You can see that on 2/27 we got above it, and then we just smashed back into the , which is not a development, by any means.
Now that BTC has fallen back into the , we could see some consolidation. It's also possible that we turn to test the pink of the channel that we've just broken into. You can see right now that a bit of support is being found right now, on the 78.56% retrace. This level is going to be critical in determining whether or not we consolidate or continue to plummet lower. If the 786 is lost, the next stop will probably be around 7585. However, if the 786 holds, we could consolidate, and test the pink , to see if it will act as resistance. If that happens, we could see a major continuation in the bear market.
On the , you can see that it is continuing to expand to the downside, as the sell side consumes the chart. However, the sell is decreasing, which leads me to believe that we could see a reversal somewhere around here. With that said, you should never try to catch a falling knife. BTC is a falling knife right now, and personally, I'm going to remain in the safety of cash, until the time is right.
I want to draw your attention to the trough on 1/17. You can see that it was slightly deeper than the trough of the left shoulder of the pattern. Now, here we are creating a deeper potential trough than the right shoulder. In terms the symmetry of this pattern, it isn't far fetched to think that we could reverse here, and retest the blue neckline, after forming a nearly mirror retracement of the one at the beginning of the pattern. There currently is no indication of that. I'm only speculating on the possibilities.
To be clear, BTC is falling like a rock, the momentum is expanding, and the sell is healthy, but dwindling. BTC is back inside of the , and it has technically formed a lower lower high, and now a lower low. The pattern is still technically valid, but the current bias remains to the downside. A break below the 786 should send BTC down to the 7585 level. This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
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