Using my incredible drawing skills ;-) I have shown BTC forming a Head & Shoulders top pattern. I am not 100% happy with the H&S interpretation, as the pattern is messy and unclear, but it is the most probable interpretation of where we are now.
The Head & Shoulders pattern tends to result in a strong move down once it penetrates the support line, OR a strong move upwards if it bounces off the support line. Either way, we may well see a strong directional move shortly, as the second shoulder is almost complete.
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Head & Shoulder was rejected at the support line, and the upward volume was quite strong. The H&S failure is not complete until BTC reaches the completion line.
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Gotta be honest - I'm currently finding it hard to believe strongly in this head & shoulders failure. Even though in theory it should indicate a further strong rise in Bitcoin, the volume on the current rise is not very powerful, so I'm not feeling the conviction of the bulls yet. And it's still just about possible that the current rise constitutes the formation of the second shoulder of a bearish head and shoulders, so we're not out of the woods just yet...
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Can't argue with that head & shoulders failure! And we got the volume, eventually.
seems like it bounced up. Still don't think that we saw the 'real' correction...
GlenGoodman
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@Milamansi, Yes, I don't think the head & shoulders has finished forming yet, despite that little bounce. The volume on the bounce was too weak for it to be a decisive move. We still have to wait and see....
GlenGoodman
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@Milamansi, NOW we have a more convincing bounce. If it can take out 8140, that would complete the head & shoulders rejection.
Milamansi
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@GlenGoodman, well, I'll get liquidated soon once we reach the 8kish.