DrDovetail

BTC breaks up from diamond; finds resistance at broadening wedge

BITSTAMP:BTCUSD   Bitcoin
So its now looking like the diamond pattern may indeed be a diamond bottom rather than a bearish continuation diamond as we have broken bullishly upward...however 2 big resistance lines stand in its way that may be powerful enough to send it back down and create a bull trap. The top trendline of the falling broadening wedge(in green) and the 1 day 50ma just above that (not shown on the 4hr chart) these have both been very steady resistance and there's a chance one or the other have enough resistance power behind them to knock this pattern back downward. I would be more comfortable thinking the upward break is legit if we see price action rise above the head on the 1hr charts head and shoulder pattern and invalidate it...currently where price action has seen resistance is at the exact same height as the peak of the right shoulder which may be enough to trigger a double top on smaller time frames. This idea is being left neutral because although it looks pretty good for the bulls on the 4hr chart there' also plenty of resistance and bearish possibilities that could change that...if we can close the daily candle this high up and follow on the next 4hr candle with a big bullish surge then the bull break is legit if not there' is still time to fall..but considering there's no more room in the diamond I think we will need to see a bearish break below it this candle close instead of next. As always not financial advice just my own personal understanding of the current price action. I think a bull break takes us to 4.1k and a bear break to around at least 3.6k but either are currently possible with probability now currently favoring the bull break slightly more.
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