I don't like the fact that we dropped to 3500, because that took away the the market had build the past month. This because it broke the previous low at 3600 from around Christmas. That red zone on the left, is an important zone to watch. Because IMO that shows the difference between the bulls and bears. If the market is not able to really break that zone, it could become very . So i think a break is necessary to get the pressure off from the bears. Otherwise i am afraid we could see a pattern like we had since the Feb low at 6K. Forming lower highs (11.7K/10K/8.5K/7.4K), showing each time money is flowing away from this market.
Before getting to , that even though my first thought since the 3200 low was a much faster move up to the 4200/5200 levels, there was a more healthier option. This was making a much more solid foundation for the market around the 3200/3500 area. The meaning of this would be, that if we would drop to these levels again, buyers start to enter the market again. So in other words, each time price gets to that range again, an army of bulls show up to buy everything up again. This would be a much better foundation long term than the i assumed at the start of the rally.
Short term, the blue line on the right is a realistic option. Assuming the current will fail, since that happens 70/80% of the times the past half half year. If the bulls can keep it above the 3640, it could work out. But i think, even if we get a push up here, we will make a correction down again to test the possible new support at 3500/3600. At the moment i don't have a bigger picture plan, so i will keep watching this from the sidelines until i get a clearer picture. If we get something like the blue line, i will probably get in again. I would keep an eye out on ETH, because the 112/113 is a very important level there. A break of that level, might indicate the bears have taken over again.
As things develop, i will try to give a better indication of the direction for the coming weeks.
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1) We move like the blue line, suggesting a new impulse wave up is starting, but that means we need to get above the red zone without any real corrections. If that happens, there is a decent chance the whole move down was still just a big correction and we will start the second wave up since the 3150 low.
2) We move in correctional waves, suggesting the drop from 4100 a week ago was an impulse wave and this is just an ABC, where we will move up a bit, but only a correction before we continue to crash again. (red line)
I still think we should see a wave up, to complete the correction (even in the bearish version), but this triangle could already be it, if we stay inside of it much longer that is. Because corrections don't always need to complete in price, they can also complete in time.