BTCE:BTCUSD Bitcoin / Dollar
My last chart also anticipated a pre-dump rally, but expected it to max out at the channel boundary around $430. But the constant pushes from Chinese exchanges have resulted in a slow, determined penetration of that channel top, and now has the 4H ichi cloud in its sights. That, combined with the very large asks on BTC-e had me believing we'd easily be dropping from this point into a selloff.However, when I considered the content of the upcoming May 10th self-imposed deadline for closing leveraged positions agreed to by all the major Chinese exchanges in their "joint statement", I saw the makings of an epic short squeeze, rallying all the way to kiss the January triangle once more before plummeting (most likely in concert with bad PBOC news). That's when I noticed a much better location for point "B" in my 3-drives pattern, at the major intersection of the rising channel bottom, the January triangle, the previous $470 support/resistance line, and the vertical May 10th dateline. The revised ratios of the legs of this pattern are now precisely proportional again, and the new low target is $353 on BTC-e. Thus chart is marked long for this leg up, but then ultimately short for the trip to point "3".Expect.UPDATE 5/9 10AM: downward channel clearly breached over multiple periods, and we've entered the 4H cloud which has suppressed price for so long. China summit is starting in 10 hours, and the "joint statement" deadline of no new leverage positions (but existing ones allowed to close later) is pending in 1H. Multiple signals showing this rally is on its way.
that strong 4H cloud has been a major obstacle for a while, but it's thinning, and while the price has been riding the long $428 support line, it's continuing to poke the cloud. The trajectory is slow and deliberate, and looks likely to breach the cloud, if only a bit later than I had originally projected.
The fibs from the selloff on April 27th have been framing the price action perfectly ever since. We've walked down and up and back down and now back up, climbing rungs like a ladder. Figured I'd see where this ladder goes, and when I scrolled up to see the 1.618 extension, it conveniently lands right at my high $470 target