In my last idea, I was confident about this moment, and I said it's a good one to buy some coins, but I wasn't aware of what might be coming.
As we can see on the chart, after the last upward trend, we might be on our way to forming a right shoulder, which could complete a head and shoulders pattern and announce an even deeper pullback afterwards.
From the TradingView Wiki
Head & Shoulders Top (Bearish)
1. The left shoulder forms at the end of an extensive advance in price. The move generally occurs during a period of high volume. After the move up (peak), price declines to an extent to form a valley.
2. From the valley formed at the end of the left shoulder's formation, price then rises once again to a level that is higher than the peak of the left shoulder. This move is accompanied by either normal or high volume. Then, just like the left shoulder, price then reacts and falls again on low volume. The valley should be right around the same level as the previous valley formed at the end of the formation of the left shoulder.
3. The right shoulder then begins formation. The right shoulder in general is formed on lower volume than both the left shoulder and the head. The key aspect of the right shoulder is that its peak must be lower than the peak of the head.
4. Once both shoulders and the head are formed, the pattern is essentially complete. For the formation to be valid, a horizontal line known as the neckline should be able to cross through all three sections with the two valleys between the head and both shoulders resting on the line.
5.Now that the Head & Shoulders pattern has been formed, all that's left is price confirmation. If price proceeds to fall below the neckline, this is considered to be confirmation of the bearish setup.
Indeed the left shoulder occurred at moment of high volume, and this volume has been dropping ever since, with a small increase during the forming of the head, as we can see on the chart.
Furthermore, if the MACD fails to pick upward momentum, if might lead to a lower high, with a further fall in price.
So this may be a good moment to buy the dip and to make some profit, but also the last one, at least for a while.
That's why we should be on the watch during the next days and week to see how things develop, and that'll tell us how to act accordingly.
We'll be on the watch to see if prices cross the neckline and if bulls fail to pick up momentum and finally a right shoulder is formed.
For more information we can read the Investopedia article too, which offers good explanations and an educational video about this pattern.
As we can see on the chart, after the last upward trend, we might be on our way to forming a right shoulder, which could complete a head and shoulders pattern and announce an even deeper pullback afterwards.
From the TradingView Wiki
Head & Shoulders Top (Bearish)
1. The left shoulder forms at the end of an extensive advance in price. The move generally occurs during a period of high volume. After the move up (peak), price declines to an extent to form a valley.
2. From the valley formed at the end of the left shoulder's formation, price then rises once again to a level that is higher than the peak of the left shoulder. This move is accompanied by either normal or high volume. Then, just like the left shoulder, price then reacts and falls again on low volume. The valley should be right around the same level as the previous valley formed at the end of the formation of the left shoulder.
3. The right shoulder then begins formation. The right shoulder in general is formed on lower volume than both the left shoulder and the head. The key aspect of the right shoulder is that its peak must be lower than the peak of the head.
4. Once both shoulders and the head are formed, the pattern is essentially complete. For the formation to be valid, a horizontal line known as the neckline should be able to cross through all three sections with the two valleys between the head and both shoulders resting on the line.
5.Now that the Head & Shoulders pattern has been formed, all that's left is price confirmation. If price proceeds to fall below the neckline, this is considered to be confirmation of the bearish setup.
Indeed the left shoulder occurred at moment of high volume, and this volume has been dropping ever since, with a small increase during the forming of the head, as we can see on the chart.
Furthermore, if the MACD fails to pick upward momentum, if might lead to a lower high, with a further fall in price.
So this may be a good moment to buy the dip and to make some profit, but also the last one, at least for a while.
That's why we should be on the watch during the next days and week to see how things develop, and that'll tell us how to act accordingly.
We'll be on the watch to see if prices cross the neckline and if bulls fail to pick up momentum and finally a right shoulder is formed.
For more information we can read the Investopedia article too, which offers good explanations and an educational video about this pattern.
