NOW A TEST OF PREVIOUS LOW. THE RISING WEDGE CHART PATTERN AND BEARISH DIVERGENCE.
The wedge formation looks much like the symmetrical triangle. What makes it different is its slant. The wedge formation has a noticeable
slant against the prevailing trend. Therefore, a rising wedge is considered bearish. The wedge breakout occurs most often in the third part of the
total length of the wedge. However, the price might go all the way to the very end of the wedge. This is one of the differences from the symmetrical triangle. Wedges take less time to form in downtrends than in uptrends.
Price trend can be any direction leading to the pattern.
Price bounces between two up-sloping and converging trendlines.
Price should touch each trendline at least five times to outline a good pattern. That's 3 touches of one trendline and 2 of the opposite.
volume trends downward at least 74% of the time until the breakout.
Breakout can be in any direction but is downward 69% of the time. The pattern confirms as a valid one when price closes outside one of the trendlines. Rising wedges, especially for downward breakouts, are some of the worst performing chart patterns. Downward breakouts have unacceptably high failure rates and small post breakout declines, so we advise all traders to wait for proper breakout to the downside before taking a trade.
THE BEARISH DIVERGENCE:
Bearish divergence occurs when price makes a higher high but the indicator forms lower highs. The two data streams diverge in direction. Price will eventually, usually, follow the indicator lower. This doesn't mean an immediate sale, but you should be ready to flee or short the coin.
VERDICT:
SELL/SHORT: $5162.5
BUY:$4979.1 down to $4749
STOP LOSS:$5318.6
Risk Disclaimer:
Trading cryptocurrency on margin carries a high level of risk(volatile), and may not be suitable for all trades who are yet to understand how to use STOP LOSS. The high degree of leverage can work against you as well as for you.
It is your responsibility to confirm if you want to take this trade or not. Trade only with risk capital; that is, trade with money that, if lost, will not adversely impact your lifestyle and your ability to meet your financial obligations.
If you do not fully understand these risks you must seek independent advice from your financial advisor.
The wedge formation looks much like the symmetrical triangle. What makes it different is its slant. The wedge formation has a noticeable
slant against the prevailing trend. Therefore, a rising wedge is considered bearish. The wedge breakout occurs most often in the third part of the
total length of the wedge. However, the price might go all the way to the very end of the wedge. This is one of the differences from the symmetrical triangle. Wedges take less time to form in downtrends than in uptrends.
Price trend can be any direction leading to the pattern.
Price bounces between two up-sloping and converging trendlines.
Price should touch each trendline at least five times to outline a good pattern. That's 3 touches of one trendline and 2 of the opposite.
volume trends downward at least 74% of the time until the breakout.
Breakout can be in any direction but is downward 69% of the time. The pattern confirms as a valid one when price closes outside one of the trendlines. Rising wedges, especially for downward breakouts, are some of the worst performing chart patterns. Downward breakouts have unacceptably high failure rates and small post breakout declines, so we advise all traders to wait for proper breakout to the downside before taking a trade.
THE BEARISH DIVERGENCE:
Bearish divergence occurs when price makes a higher high but the indicator forms lower highs. The two data streams diverge in direction. Price will eventually, usually, follow the indicator lower. This doesn't mean an immediate sale, but you should be ready to flee or short the coin.
VERDICT:
SELL/SHORT: $5162.5
BUY:$4979.1 down to $4749
STOP LOSS:$5318.6
Risk Disclaimer:
Trading cryptocurrency on margin carries a high level of risk(volatile), and may not be suitable for all trades who are yet to understand how to use STOP LOSS. The high degree of leverage can work against you as well as for you.
It is your responsibility to confirm if you want to take this trade or not. Trade only with risk capital; that is, trade with money that, if lost, will not adversely impact your lifestyle and your ability to meet your financial obligations.
If you do not fully understand these risks you must seek independent advice from your financial advisor.