After the huge continuation of the correction down to the 9k range, there is a more likely scenario where BTC is going to consolidate at a certain range meaning that we may experience a short-term upside. Take a close look at how the EMA on the 2 hr has been following a very nice and simple pattern that is usually seen on corrections. The EMAs have so far been following a pattern that occurred during the first major dip from the ATH to 13k. This pattern consists of a short-term death cross after an overbought rally to the upside (50EMA and the 20EMA, hence short-term), a crossover trap where prices test above the EMAs for a short while for a bull trap, then the real golden cross occurs after a strong squeeze between the 20 EMA and 50 EMA.
I used the EMA as opposed to SMA to avoid a longer lag as the EMA tends to react quicker which can be very useful to identify a reversal in trend, be it short term or long term.
The pitchfork is a parallel channel I initially drew to identify resistance and supports for pivotal moves, but I decided to apply a pitchfork as prices tend to show strong reactions after hitting a certain fib. If you look closely, the price is consolidating in anticipation of breaking the pitchfork median as its resistance.
The blue curve lines are the parabola support and resistance as stated in the chart. These parabolas are symmetrical parabolas meaning it was drawn without having me adjusting the line so I can force it to touch certain areas of the price after it is first made. If you have noticed, there is another support (Support 2), this is another symmetrical parabola curve which is the very last one where if it breaks, we can start talking about long term trend reversals and not just a correction in a bull trend.
I will publish another chart soon focusing on how the parabolas and the pitchfork help indicate strong price levels for reversals. Follow me to stay updated!
You can contact me at www.twitter.com/rexyfayed
I used the EMA as opposed to SMA to avoid a longer lag as the EMA tends to react quicker which can be very useful to identify a reversal in trend, be it short term or long term.
The pitchfork is a parallel channel I initially drew to identify resistance and supports for pivotal moves, but I decided to apply a pitchfork as prices tend to show strong reactions after hitting a certain fib. If you look closely, the price is consolidating in anticipation of breaking the pitchfork median as its resistance.
The blue curve lines are the parabola support and resistance as stated in the chart. These parabolas are symmetrical parabolas meaning it was drawn without having me adjusting the line so I can force it to touch certain areas of the price after it is first made. If you have noticed, there is another support (Support 2), this is another symmetrical parabola curve which is the very last one where if it breaks, we can start talking about long term trend reversals and not just a correction in a bull trend.
I will publish another chart soon focusing on how the parabolas and the pitchfork help indicate strong price levels for reversals. Follow me to stay updated!
You can contact me at www.twitter.com/rexyfayed
Trade active:
Fractal still on point as the golden cross executes. Fibs are used to identify measured moves or short term target. Entering as it retests the 20 EMA would be an ideal move. For a mid-term target, I'd wait to see how this builds up. A possible scenario would be a target on the pitchfork resistance.
Fractal still on point as the golden cross executes. Fibs are used to identify measured moves or short term target. Entering as it retests the 20 EMA would be an ideal move. For a mid-term target, I'd wait to see how this builds up. A possible scenario would be a target on the pitchfork resistance.
Trade closed manually:
As I mentioned on my last update, the ideal move would be to enter as price confirms the golden cross where the 20 EMA is retested. As it did not do that, the trade/fractal has failed.
A failed trade is still a good trade if risk is managed. As simple as that.
A failed trade is still a good trade if risk is managed. As simple as that.