Thoughts on the possible Inverted H&S forming

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
Hi all,

This is far from the first IH&S chart you'll find on here. However, I'd like to add my opinion by comparing some of the pros and cons of expecting an IH&S:

  • BTC is testing RSI40 as a support. Successfully turning it into a support would mean the bulls are getting more control in the market.
  • The way the IH&S is forming, the shoulders would have similar width and depth, which adds to the strength of the pattern.
  • The Tenkan-sen and Kijun-sen are far apart, which could indicate a need for an upwards correction. (see image 1)
  • The Ichimoku cloud on the 4h chart is bullish . (see image 2)

Image 1

Image 2

  • Volume really has to pick up to break through the neckline.
  • Not only is the neckline a weekly resistance (line in deep red), it's also a fib retracement level, making it a strong resistance.
  • The Ichimoku cloud is still bearish on the Daily chart .
  • The Tenkan-sen was tested as support but failed and might turn into a resistance for the move up.

I will be watching Bitcoin closely the coming days to see if the Pros hold and the Cons fail. In the meantime, please remember that the market does not owe you anything; the pattern is only valid if it is complete and conforms to the criteria.

See this link for more information on IH&S and when it is valid.
Comment: In case the IH&S turns out to be valid, the price target would be 7950. This target can be determined by taking the depth of the Head and flipping it over the neckline (from the breakout point).
I'll be placing my buy order at 6875, with Stop Loss around 6720 (below fib retracement level, neckline and weekly support) and with 7630 as conservative target, since 7700-7800 seems to be a strong daily resistance.
Comment: Please note: this is an idea for a short term trade. I do not expect the bearish market to end just yet.

Long term, I expect the scenario presented by user Excavo to be accurate:


6-7 more weeks
@ESSCRS, what do you mean?
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