BTC King H&S Update - Bart's Workout

Smadis Updated   
Hello again! This post will analyze the possibility of an alternate H&S neckline that I did not cover in my last week's post. The reason was simple - I do not like very steep head and shoulders patterns so one could question whether this is a H&S at all. Well, the rules of a head and shoulders state that the lowest point of the right shoulder should be significantly lower than the top of the left shoulder. The top of the hypothetical left shoulder would be 10500 in this case and the lowest point of the right one would be 9800. So... it is entirely subjective whether a 700 dollar difference is significant or not. It is entirely normal for the price levels of the left and right shoulders to vary significantly or appear lopsided and this is expected when the neckline has a steep diagonal tilt. It is just important that both of the shoulders are significantly lower than the top of the head.

However, I did want to address all of the haters who think that I can only draw H&S patterns. Please understand that the last post was just a publicity stunt to draw your attention to the bearishness of the current macro picture and it worked a lot better than expected. I really don't care if we form a head and shoulders or not. It is just important to me that we keep making lower highs from now on to validate the bearishness of the macro picture.

However, if we do entertain the idea of a H&S forming then we have an interesting new development. We saw a pump to the 11500+ region which was my target area of the right shoulder. Therefore, this increases the likelihood of this steeper neckline being the correct one.

So, we have some options here:

Option A: The less steep neckline based on daily closes ends up being the true neckline
Option B: The steeper neckline based on wicks ends up being the true neckline
Option C: Both of the patterns end up playing out and the bearish retest of Option B ends up being the shoulder of Option A.

The actually important point to consider here is that we have been forming this multi month trend line which will become staunch resistance if it is broken. If that trend line is broken then even the biggest permabulls should consider the very real possibility of retesting the 61.8% Fib level in the low 7k area. This is very normal behavior even in bull markets. Then we will have to see how big the bounce is and if there is a possibility of forming an ever bigger bullish inverted H&S. It all depends on how convincing the bounce at the 61.8% level is.

My personal belief is that we have not fully corrected from 20k yet and there are several reasons:

1) The move from 20k to 3k was shorter than the last bear market which goes against the lengthening cycles theory.
2) We failed to create a higher high compared to 14k and got rejected by our declining weekly RSI resistance line.
3) The current macro picture is looking an awful lot like a WXY move with a flat correction in between. You can also look at it as an WXYXZ correction which is the same thing.
4) There was too much euphoria and "this is definitely the bull market" sentiment at the 12k top.
5) Historically, we have always followed a downwards sloping channel in bear markets. The good thing about this is that it would be forming a massive bull flag which would be very bullish in nature after we get our correction.

This post is already very long so I will end it here. If we keep respecting the steep trend line based on wicks then we might see a boring next few months due to BTC curling up into some kind of symmetrical triangle which would coincide with the right shoulder. Therefore, don't forget to follow me if you don't want to miss my next update because it might be in quite some time when have some proper developments in the price action! See you and thanks for all the support from the civil commenters. I enjoyed reading your feedback! :)
Hey, a quick update. So the H&S was definitely invalidated. We will have to see if the WXY macro scenario will still play out. 13.8k is the key level to watch!