If you haven't had a chance to read that analysis, check it out here:
In this analysis, I am seeing an exact mirror image flip set-up of the descending traingle at the $6,000 from 2018.
In this case, we've got an , which are typically patterns.
Something to watch out for though is a 'long' leverage liquidity grab where they stop hunt long traders.
We saw this exact same move at the $6,000 level before the big move down where a majority of short traders were liquidated out of their positions.
We also hit a 261.8% extension from the swing low and swing high before the break down move which has given us the support at $3400 and is typically a strong reversal point on downward moves for Bitcoin .
If the structure doesn't break down and close below the triangle on the , we could still see a target at the $5380 level. I used the exact same set-up from the break down to give an idea of what this might look like (including a stop hunt and liquidity grab for longs.)
Getting some cheeky buy orders at that $3450-$3500 zone may be a savage tactic in case we do get that wick down.
Invalidation of this structure would be a break and close below the triangle support on the .
Full trade set-up looks like this as well as a potential long buy if we do get that break down wick.
What do you guys think? Are we going to continue following this out until May before we get a break out, or do you see something else in the cards?
1. The 'Short liquidity' gap is not correct in that sense: It was caused by Bitfinex due to the 'bank-run', people panicked back then that they won't be able to withdraw their fiat funds, exchanging their holdings to crypto like BTC & rushing out of Bitfinex, which led to this huge spike. We didn't have this on other exchanges to that degree breaking weekly LHs.
2. The pattern: You could argue the psychology of ascending triangle, but you know that usually it's a trend continuation pattern: We don't have that right now. Also I dislike the fact that we've been going up since the current HL at 3400 (Bitfinex): If we top out here now at 4k psychological, this will give us a pretty strong hidden bearish divergence on the weekly.
=> Even if we break bullish the 4,2k, I would rather first see a consolidation/move down, form a HL, and then get the break-out. => The more touches you have on an ascending triangle, the weaker it gets. Currently we have barely touched it a second time, immediately building a shooting star & shooting down ;)
Thanks for the comment.
I was mostly leaning bearish with a continuation triangle to the downside, but so far we're seeing strong reactions from the bulls. You can hedge short on a future contract at the $4000 levels if you think it's going to move lower and buy spot on the rising support line.
Lots of ways to play it, but right now, the only thing that matters is a break out or a berak down in either direction.
You can call it whatever you want but the fundamentals usually line up with the technicals. We saw that 'fundamental' event go up and tag the 61.8% retracement level of the bear market low to the all time high to within $50.
If you want to play the game, you have to follow what the big money do and hunt for clues on where they'll try and hunt you out of a trade.
I personally barely play Bitcoin, I guess the last time was in July on that huge inverse H&S break: I rather play high beta versions of BTC like EOS in the case of a bull break: The recent equilibrium break of EOS at $3 psychological was just amazing, we touched the previous weekly support at 4,5 with almost 50% follow-through. This is beautiful & textbook TA.
In the case of a bear break/further consolidation of the sector, I'm gonna watch XRP closely like I told you -amazing downside potential if we loose the 30 cent psychological. => The trendline over there is holding up pretty good.
But anyways, said this before & will say again: So happy to have someone here who is at least aware of the technicals of patterns & stuff like risk management, compared to the other Moonboys. This is awesome for idea exchange on a knowledgeable level. Greets buddy! ;)
You can draw this one in a few different ways, but I take the approach of wanting as many touches along it as possible and I don't use 'lines' more so 'ranges' from wick to body to give me an idea of where to long and short.
Of course I'm looking at a bear scenario as well and the only thing we can wait for is a break on either side with a candle closing.
Thanks for reading and engaging in a dialogue rather than just trolling.
Haha on XRP... I am actually in a long on the XRPH19 on the Bitmex chart from 8000 sats.
About trendlines: No I agree that you should get as many touches as possible, definitely. In the stock market with bigger names, it's sooo much easier to trade pattern break-outs, since the trendlines get respected much more -that's what I'm missing in crypto space, esp. with all those fake-outs.
Having said that: The lower trendline on XRP in that descending pattern gets amazingly respected on the Daily currently. Just have a look at the touches: How many times we're touching the bottom vs. how many times the 'potential' top. That's what I meant the other day when I said it's relatively weak: It get's dragged higher by correlation to other sector leaders, esp. BTC & LTC currently. So yeah ..would definitely look at other candidates to play bull, but in case of a bear-break, this will be huuuuge. The trendline break will be the first signal, the 30 psychological the second. Not sure though if XRP or EOS will make more to the downside. Don't forget XRP never broke its summer lows compared to the other major names last November, that's why I hope for a bigger move in the bearish scenario. Also, we could first reach the 28,5 support, and consolidate for a while, before we break to 25: we had exactly that scenario during the summer dump with a slightly upward tilted trendline: first a break to 44,5 previous swing lows, a few days of consolidation, then the dump to 25 cents.
This is what happen in the past from here onwards...
2011 - 66% Drop / 29 Days
2014 - 65% Drop / 62 Days
2018 - 65.5% Avg Drop = 1450
I know few pro analyst in twitter who predicted 3k last year before we went down from 6k and almost everyone in TV saw going up from 6k and few saw 5k or 4k but not 3k. Even the guy I found in TV who predicted 3k seems like working for the cartel... LOL