Now we have tested the low around 3500 once again and there are a few scenario's now.
A) pattern, this would mean we have to break up soon and move towards the 4100 again, break that turning point and move towards the 4600/4700
B) Big triangle (on the right), we break the small triangle on the downside and simply move down already.
C) Big triangle, we break the triangle on the upside and follow the blue line and turn down again to complete that big triangle. Even if we follow this path and complete the triangle, there is ALWAYS a chance for a break to both side. But in this setup/stage the is much more likely of course and the sentiment says the same.
At the moment there is a clear upwards from the low the past 12 hours, which forms the support line of that small triangle. This one is the first one which can tell us what the game plan might turn out to be. At the moment it is already at it's . So we might already get an answer the coming few hours of which game plan will turn out.
Yesterday i mentioned that we should still see another wave up to complete an correction. This one completed at the 4100 already, but that is the lovely thing about EW wave's, it can simply be part of just an even bigger correction. Meaning yesterday's was just wave A, wave B is done and we should be in wave C (scenario A from above, the ).
The movement has been a bit extreme and there is still panic in the market, that is one thing that is sure. We are not seeing movement that show the market has adjusted to the current prices and is looking at % movement. No it's dropping 10/20% a day because we still move in those 300/600 points movements, so the market has still not adjusted to the current conditions yet. This will probably stay like this until we see that real aggressive push back from the bulls with big short covering, making a 20/25% recovery from the low in one day.
While i am writing this, that already broke and we are dropping towards the low again. Which means the scenario A is probably off the table already, unless we see it move back up to the 3800 within a few hours. So there is still a 30% chance for that version to be in play. If the 3500ish breaks, with high than we should just continue to drop even more. If we don't see high , there might still be a chance the support will hold.
When looking at the Alt coins, most show similar patterns so nothing clear to go on those. Expect the fact that of course that in general they all look very and weak.
I usually try to give my preference, of what scenario i think might play out. This time i don't have an opinion yet. Rather see some more movement play out first. We have at least very clear levels to watch now on the bigger picture, which is the 3450/3500 and the 4100. For the short term, we already broke that as i mentioned, so if we don't see a move up again above 3750 very quickly we will most probably drop towards that 3500. So for now i can say, scenario's are most likely to play out, unless we see the 3600/50 hold and see a move up within 2 hours or so again above the 3750. So for me it's just watching to see how things unfold first before i start to trade this.
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I was just about to write, that normally it's too soon to break the 3500 low, because usually we see the big triangle from the original post play out rather than an immediate drop. All of a sudden this move up happens, out of nowhere.
Looks like it's just a shake out, but could potentially also be that move towards 3900 to complete the big triangle. Still watching to see what happens. Only a (normal) break of 3750ish (so not a 2 second wick) could mean the 3900 might still get tested.
The current squeeze we just had, formed a bull flag which has already failed. We have seen these 200ish point squeezes many times already the past 2 weeks, almost each one of them has failed so far. Something i showed in a previous analysis. Looks like a repeating pattern, moving identical each time
But funny to see how the price moves up 80 points AFTER those fake sell walls. There is a fight going on on Bitmex, because there are some very big buys happening there, but still below resistance. So it seems it is still not enough, but of course i have no idea how much more ammunition they have left
Think the 3600ish is an important level to watch and the 3750 level i mentioned a few times before.
So i expect at least a pullback to happen. Normally it should stay above the first green support level (left chart) but a break of the second one would mean it will most probably fail and could see a countermove to the downside with a target much lower below 3500.
Current movement is a bit similar as Sunday, making a decent bull flag, breaking out but making a lower high. So best case it stays above the 4000/3980, but the 3950ish could also still work out.
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it's quite evil when you think about it