milobowman
Long

Inverse head and shoulders

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
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When bitcoin goes down by $400, everyone freaks out. It's as if they expect it to move in a straight line.

Charts look like a series of ups and downs because that's what happens during a larger movement up or down: we fluctuate. A $400 drop is nothing. This is the peak of the second shoulder in the Inverse head and shoulders . Right now, this is a great pattern for the bulls, and this $400 drop should be exactly what the bulls want, as long as we go up from here.

Neck line is at about $6800. If we reach that, then one of two scenarios will occur:

1. Breaking that up would send us straight to $7800 with hardly any resistances in the way. We'd probably retrace a bit because that would also be on the long term trendline , probably going down to $7000 (at which point the $800 drop would send everyone on tradingview into a bearish frenzy...)
Then we'd test the long term trendline again. If we break that up we're going to $8000, minimum, maybe even $8800. This is the scenario i've drawn in. If we bounce down, the market is still in a long-term downtrend and will then go below $5000 by the end of september.

2. Alternatively, if we reach the neckline at $6800 and then bounce DOWN, that would mean that the head and shoulders is invalidated, and we're ranging, with likelihood of going back down.

If we never reach the neckline, and instead go down from here, then it's bearish , and i'm out.

Right now we're above this support, so it's a great time to buy. Set your stop loss tight and you have a great way to get in with very limited downside and promising upside.

My prediction: $7800 on july 20th, my birthday. It would be a nice present!
Jul 25
Comment: Well, we touched $7700 on july 20th, and it was july 23 when we actually tested the trendline. i can't be perfect but i'm pretty happy to get it correct within 3 days!

After that, we didn't bounce off, we broke straight through and smashed a few major resistances including the 50 day MA and ended up at the 61.8% retracement. I can see us testing the 200-day MA soon, not before a little pullback, but the bullish momentum could die off by then. I'd expect a little double top before a head back down to 6.8k, or even 6k, or 5,8k, or - perhaps in months from now - below 5k for one final capitulation.

A lot of people are saying that was the bottom for this year - i don't think so. The 2014 bubble had a downtrend that lasted longer than this - we've only been going down for 7 months and that's a pretty small crash really. However, things could have sped up in this market... Either way, i'm predicting that we'll make it out and resume the upward trend. Judging by the fundamentals - the leaps forward being made in infrastructure and blockchain investment - i'm predicting another bubble to be in 2020-2021, and, possibly, to coincide with a major global market crash. It could be the cause of a recession when you think about it. It will be bigger than the last - a true bubble. In the tech bubble EVERYONE was involved. every average joe had a tech stock. We could see that with bitcoin too. we're talking $100,000+/btc. People will start borrowing money to buy bitcoin - seriously (it's the public we're talking about here!) - and bad debt is what causes crashes. That or derivatives.
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