BTC : The Paper Airplane fractal, get ready for landing
Hello ! Second TV Idea in the pipe, my first one did react pretty good so I thought I would do some more.
I think the chart speaks for itself. I'm making these conclusions based on my own swing trading system that I will not fully disclose here. It works with a 86.2% success rate since October 2017. The fractal could indicate that further bearish momentum is in the works. This is why I would go short around 6800, or at maximum around 38.2 fib at 6880ish. Any stop loss around 7180 would be safe. I don't have any target down.. We could possibly simply retest the 6000 area. Maybe we break it, and things would get pretty ugly from there. I think we will see a clear direction on Monday, and then depending on the action, we can react accordingly.
The only thing making me tick is the amount of shorts currently opened. Check the BTCUSDSHORTS ticker for yourself. Now, when most people are saying "It's at all time high, we HAVE to get squeezed", even CNBC talking about it, I would like to point out the fact that in between April and now, there has been a really tremendous amount of people moving into leverage, just look at the overall BitMex volume. If there is further downwards momentum, I think shorts can reach 45K easily, why not even more, before getting some sort of squeeze.
Since we dropped in February, we have been making some sort of Wedge, or Triangle, that keeps making lower highs and lower lows. If we take in consideration the weekly Heikin Ashi, We have always seen a continuation from the top, to the bottom, and from bottom, to top. What I mean is that we never touched top, or bottom of the big wedge twice before reversing. We always touched the top, then made a new bottom, then made a new top... Etc. We perfectly touched 8.4 as new top of the wedge from the previous low at 5800. So we should see downwards momentum to find a new bottom. 5500 seems plausible. If we go up from here, it means a cycle is ending, and we have to chart again to find new scenarios. But again, if you're playing the odds on a statistical point of view, there is way more chances of us going down than going up.
I will update this idea as the trade develops. Remember that this is no financial advice, do your own research, have an open mind, and don't blindly listen strangers on the internet. Join the discussion ! Let's exchange ideas.
I think the chart speaks for itself. I'm making these conclusions based on my own swing trading system that I will not fully disclose here. It works with a 86.2% success rate since October 2017. The fractal could indicate that further bearish momentum is in the works. This is why I would go short around 6800, or at maximum around 38.2 fib at 6880ish. Any stop loss around 7180 would be safe. I don't have any target down.. We could possibly simply retest the 6000 area. Maybe we break it, and things would get pretty ugly from there. I think we will see a clear direction on Monday, and then depending on the action, we can react accordingly.
The only thing making me tick is the amount of shorts currently opened. Check the BTCUSDSHORTS ticker for yourself. Now, when most people are saying "It's at all time high, we HAVE to get squeezed", even CNBC talking about it, I would like to point out the fact that in between April and now, there has been a really tremendous amount of people moving into leverage, just look at the overall BitMex volume. If there is further downwards momentum, I think shorts can reach 45K easily, why not even more, before getting some sort of squeeze.
Since we dropped in February, we have been making some sort of Wedge, or Triangle, that keeps making lower highs and lower lows. If we take in consideration the weekly Heikin Ashi, We have always seen a continuation from the top, to the bottom, and from bottom, to top. What I mean is that we never touched top, or bottom of the big wedge twice before reversing. We always touched the top, then made a new bottom, then made a new top... Etc. We perfectly touched 8.4 as new top of the wedge from the previous low at 5800. So we should see downwards momentum to find a new bottom. 5500 seems plausible. If we go up from here, it means a cycle is ending, and we have to chart again to find new scenarios. But again, if you're playing the odds on a statistical point of view, there is way more chances of us going down than going up.
I will update this idea as the trade develops. Remember that this is no financial advice, do your own research, have an open mind, and don't blindly listen strangers on the internet. Join the discussion ! Let's exchange ideas.
Comment:
Second scenario played out.
We are currently sitting in the area that I mentionned yesterday. Momentum was good and followed up well after breaking the fib with ease with a good amount of shorts being closed.
Fractal isn't playing out this time..! But as we had plans for every situation, we didn't open a short. The trade didn't come to us, so we didn't take it. I'll be looking out for new setups and will be making another analysis as soon as the situation is evolving.
Thanks for your support ! Trade safe.
We are currently sitting in the area that I mentionned yesterday. Momentum was good and followed up well after breaking the fib with ease with a good amount of shorts being closed.
Fractal isn't playing out this time..! But as we had plans for every situation, we didn't open a short. The trade didn't come to us, so we didn't take it. I'll be looking out for new setups and will be making another analysis as soon as the situation is evolving.
Thanks for your support ! Trade safe.
I expect a strong resistance at the 38.2 fib level, a nice rejection followed by a bad daily close would make me very confident in opening a short position. Although, let's watch out so we don't get burned. This resistance can be crushed by a short positions closing momentum leading us around 7-7.1K area. They are still in a potential squeeze zone and this should not be ignored. Alts have been making good rallies as well suggesting that market is looking for better days. But would it be that easy ?
If momentum gathers and push prices up, I would adjust my target to enter at the top of the wedge around 7400 for a massive short position in this case, again, if we observe a nice rejection on top of the big wedge.
I give the fractal 2 to 3 days to play out. After that, it shall be considered void.
Remember not to jump in a trade to fast, and let the trade come to you instead. Always use longer timeframe indicators for extra safety.