BTC: Head and shoulders: Update

Seeing this now thanks to a chart published by @Yuriy_Bishko

He's not responsible for what I get wrong!

So possible head and shoulders pattern within a larger inverse head and shoulders formation. In fact, the head and shoulders pattern, if it plays out, would form the right shoulder of the larger inverse formation.

We've certainly seen this before, and recently.

And the volume pattern does look ready for another sell-off.

The green box is the CME 26-29 March gap that has been vexing me lately. Upside target from there would be around 74k.

Not saying any of this will happen. But be on the lookout, in case.

Probably BTC shoots straight to 74k right when I push publish.

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06 Apr 2021 14:54:53: Seems like a smaller version of what happened in March

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Upside impulse, 28 February to 13 March, retrace to the 0.618 25 March. Upside impulse 25 March to 2 April, retrace to the 0.618, possibly 10 April, +/-.

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The major anomaly in this chart is the lower high. From left to right, high, low, higher high, higher low, lower high. Perhaps the right shoulder of an inverse head and shoulders (if it formed) would not reach fully down to the 0.618? If the Fibonacci fans chart I published last night is in anyway valid, as BTC passing forward in time, it naturally tests support, even when it is higher than it was. But this is conjecture.

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The simplest perspective is impulse-correction, and that would be this:

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But there is a trend line to where it has landed now three times, and we can think of this as the base of a pattern, like a head and shoulders, or as a channel:

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Adding in Fibonacci fans is useful to map the beginning of the impulse movement, and how it formed a channel. But it also suggests that the channel may break down. So we're back to impulse-correction.

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07 Apr 2021 12:07:58: I would say the latest price action invalidates a tight channel, and even questions a midline bounce scenario on a wider channel. It's maddening, but as of this moment one trend line across the base appears broken, and this is a trend line that goes way back in BTC's history. So I lean towards the H&S plus inverse H&S with a probable target of 54.4k in the next couple of days.

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07 Apr 2021 13:41:20: This is what I'm currently seeing. If you're long and affected, try to hold to the bounce, and I would consider exiting at the 0.618 on the BTC chart. I expect a further downside reach on BTC's part. If your liquidation is far off, it's a chance to buy the dip. Will it stop for BTC at 54k? I'm not sure.

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07 Apr 2021 15:47:51: Now that the bottom of the head is in, we can update the projection on the pattern. This is what I'm currently seeing. We should retrace now to the 0.618 on the last downside impulse. The immediate upside target is 57,491. Then I expect a further impulse to the downside. BTC just touched on the outer edge of the CME gap that exists between 55,735 and 54,467. So I fully expect the next downside impulse. It will probably reach down to the 0.618 level, which is at 54,022. Whether it stops there is a guess. The measured move on the H&S pattern establishes a downside target significantly lower. But as the general picture looks, this H&S pattern is simply printing the right shoulder of an inverse H&S on a much bigger timescale, and this should take precedence at that point, and essentially halt the drop. From there, if 54,022 is indeed the base, we can expect a strong upside move, as it's possible that we're seeing, on a very large scale, the printing of a massive W formation, and we're just printing the last part of the inner structure before the impulse up. This impulse up would lead to a new ATH for BTC.

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07 Apr 2021 20:09:43: Sorry guys. I think the last two updates above include an important error. I had extended the H&S to the point where it's very deformed. But looking at this again, and price action, I think my original chart was closer to what the formation actually has been. The reason is this is important is that if we measure the move from the base, and then apply Fibonacci to chart the retracement, we have already touched the 0.618. So 57.4 in the near term is off the table, I think. I expect the next leg down very soon. The positive side of the picture is that this puts the 0.618 at the macro level firmly in as the probable base of this whole correction. So one more leg down, and that's it. This would then form the right shoulder of the inverse head and shoulders, and everything else I said applies: strong upside impulse to follow when the base comes in.