In my last post, I indicated that we may go down as part of a bigger ABC correction. The rising wedge currently forming could support that. Bulls will argue that the (C) correction already happened at my (A) and that we are now in the first leg of the final wave (5) (to USD 6.000 - 10.000). Both theory's can still be upheld.
In any case, there is a short term crossroad ahead. One line is formed by the downward channel and the second line is formed by the rising wedge.
For the moment, I favor the bulls, going up in the rising wedge. 3800 is an important support level for the bulls. Breaking that could set the (B) - (C) correction in motion.
Trade active
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Break-out of the downward channel confirmed, setting the 4 -5 wave in play. I entered into the long just after the break-out at 3950. Now setting the stop-loss at 3965 for a clean-out.
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First target reached at 4050. Took some profits. And increased stop loss to 4000 for a certain profit out.
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This is the last call for the bulls. Break this level and its bear territory...
So we have broken out of the rising wedge. However, this does not yet indicate a confirmed reversal pattern. As you can see from the link, we are still in a downward channel (falling wedge) which, for the short term, could indicate a continuation of the rising trend. Breaking the channel on the downside (give or take 3800) would confirm the reversal. This fight isn't over yet..
BrandonTao
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a bull trap?
gmtfooh
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@BrandonTao, Could be. However, it is looking more like a bullflag to me. Keeping a close eye on this. I see huge sell walls pressing the price down on bitfinex. That is often a sign that the price will go up as whales want people to sell lower so that they can buy.
BrandonTao
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@gmtfooh, yes, I saw sell walls every time when it go above 4000 this week. I bailed out at 4040.
Thank you for sharing ideas.
AaronHughes
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@gmtfooh, what do you think a good entry point for someone to jump into BTC is? im really thinking it will downtrend but im really unsure so many mixed opinions!
gmtfooh
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@AaronHughes, The best entry point is at USD 2300. Most of the predictions do not go lower than that. If we adhere to 'the wisdom of the croud' that should be bottom. If I were to get into bitcoin, I would wait for clear reversal signs. Either a steady level above 4300 (cancelling out the bull trap) or a firm double bottom at 2980. Please remember to have a solid plan when trading. First rule, don't put more in than you can lose (period!). Second rule, never chase a pump, always buy the dip. Third rule, only buy if you understand the trend and the patterns, otherwise you are not trading, you are gambling. And last but not lease, NEVER margin trade unless you are a professional trader. Be patient, everything that goes up, goes back down 1/3, 1/2 or 2/3. The same goes for down. Don't sell low and wait for the retrace.
AaronHughes
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@gmtfooh, probably the best advice ive had so far!, much appreciated ill take all of that into consideration! Ill definitley wait for it, patients is a virtue !
So we have broken out of the rising wedge. However, this does not yet indicate a confirmed reversal pattern. As you can see from the link, we are still in a downward channel (falling wedge) which, for the short term, could indicate a continuation of the rising trend. Breaking the channel on the downside (give or take 3800) would confirm the reversal. This fight isn't over yet..