Confusing priceaction on btc uncovers 3hour Diamond pattern!

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
took me a while to be able to nail down the current pattern we were in after many 1hr,4hr, and 1 day chart bull flags and bearflags seem to keep 180ing right in the middle of their breakdowns....I finally was able to connect the dots on the 3hr chart and found this diamond pattern forming. Typically diamond patterns that occur after downward movement like this one are bullish and break upward known as diamond bottoms...the vice versa is true for diamond tops. I have also read that diamonds can sometimes be continuation patterns but every example I've seen talking about that only gave a bullish example...so with the exception of a fakeout probability probably favors an upward break from this diamond, unless of course bearish continuation diamonds exist too and I just cant find any examples. This was a very sudden downtrend so to already see a reversal diamond after the downtrend had only just gotten started made me think there could be bearish continuation diamonds...if anyone knows of any please let me know otherwise I'll assume that even though we have just started a new downward trend we are already doing a diamond bottom reversal. I still think we will likely revisit the bottom trendline of the diamond one more time before any breakout upwards however so thats where I plan to enter around 3.7k with a stop loss set should it confirm a bearish breakdown
DrDovetail interned
@interned, nice thanks for the links! I actually found a couple examples of bearish continuation diamonds after posting this including one youtube video that went into great detail on the volume profile...I noticed the volume profile on the bearish continuation diamond in the youtube video matches the one we are seeing here. I also noticed that when we broke upward from this pattern we did not see the bullish volume surge we should have seen with the breakout so I ahd a feeling at that point once we got rejected at the 1 day 50ma that this was indeed a bearish continuation diamond instead..Now that we have not seen support hold at the top trendline of the diamond I'm even more confident this amy be a bearish continuation diamond but I am waiting to see whethr or not the 4hr 50ma holds and if not if we get the bearish volume surge needed for one of those patterns upon a bear breakdown,
I saw this diamond too. Nice catch :)
+1 Reply
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