DrDovetail

Potential head & shoulders pattern on the 30 minute chart

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
After an insane 1 day candle that pumped its way above every resistance on the chart except 2 but then ultimately couldn't stay above the always magical 61.80% fibonacci retracement level at 13600, we witnessed price action plummet a whopping 10% to the 11.6k range in under a minute and then quickly jump its way back to the 13k range liquidating shorts and longs alike! Once it got back up above 13k most have now assumed the correction is over and the bull run will now resume however we are currently forming this head and shoudler top pattern on the 30 minute chart which if triggered could drop us to 9.7k and reveal the correction is much more than just a 10% correction. We've been long overdue for the normal 31-41% percent correction that most bull runs tend to get much sooner than this far into the bull run so its very possible this may be the beginning of hat level of correction. In fact, a 39% dip from our current top would take us right back to our strong red horizontal trendline at 8504. Not only that, but the 1 day 50ma (not shown here) happens to be currently overlapping the 8504 trendline and creating double reinforced support with it so it would likely create a huge rebound bounce up in price if price action were to dip 39% to test it. One more confluence with that zone is that it was at 8500 or so where the gap up was found on the CME Futures chart and those kind of gaps tend to always get filled before too long so a revisit to the 8k zone is not out of the question. Of course 10k could provide enough support to prevent that or we could also already be done correcting entirely. Because all these possibilities are currently on the table his idea will be marked neutral but these are all zones to watch indeed.
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