Good day Traders
The market has chosen a direction and unfortunately I've almost lost all hope of seeing $5k happen in January, not with Chinese new year approaching and especially not after that huge break to the downside of what is most probably a very large bearish pennant.
It doesn't look pretty. It looks like we might have actually broken that bearish pennant support back on 31 December and the big drop which happened yesterday actually broke down after a retest of that pennant support as resistance.
There is also a potential H&S currently playing out with the right shoulder currently being printed. We're holding the $3600 support on Bitstamp which is good to see.
I think we'll have at least a 38.2 - 50 fib retracement from here ($3735 - $3807) where we will again meet our daily SMA50 resistance as well as major trend line resistance from our ATH ($19666) so more than likely we drop from there to print the rest of the shoulder before testing our H&S neckline somewhere around $3440 and then breaking down with a roughly $571 drop for our first target (based on the height of the neckline from the head) to around $2870.
From there #bitcoin should have a 38.2 fib retracement to around $3175 before resuming the downtrend towards our final pennant target with a target buy area between $2490 and $2640. $2640 is a 138.2 fib extension of our wave down from the 18 Nov swing high ($5558) to our 25 Nov swing low ($3474). We had a 38.2 fib retracement from that low so looking to reach at least between $2640 and our pennant target is around $2500.
Based on the height of the large pennant , I'm looking for a $1287 drop from around $3782 where we broke pennant support so a pennant target of $2495 for #btcusd.
It seems the major trend line resistance from our ATH , which has already held strong where we started to drop yesterday, might potentially be forming a large falling wedge with our trend line support connecting our November and December lows so the $2500 area might just be a short term bottom. I don't see capitulation happening just yet but only time will tell whether that support holds.
TP 1: $2870
TP 2: $2500
Stop: $3880 (above trend line resistance and 1D SMA50)
The market has chosen a direction and unfortunately I've almost lost all hope of seeing $5k happen in January, not with Chinese new year approaching and especially not after that huge break to the downside of what is most probably a very large bearish pennant.
It doesn't look pretty. It looks like we might have actually broken that bearish pennant support back on 31 December and the big drop which happened yesterday actually broke down after a retest of that pennant support as resistance.
There is also a potential H&S currently playing out with the right shoulder currently being printed. We're holding the $3600 support on Bitstamp which is good to see.
I think we'll have at least a 38.2 - 50 fib retracement from here ($3735 - $3807) where we will again meet our daily SMA50 resistance as well as major trend line resistance from our ATH ($19666) so more than likely we drop from there to print the rest of the shoulder before testing our H&S neckline somewhere around $3440 and then breaking down with a roughly $571 drop for our first target (based on the height of the neckline from the head) to around $2870.
From there #bitcoin should have a 38.2 fib retracement to around $3175 before resuming the downtrend towards our final pennant target with a target buy area between $2490 and $2640. $2640 is a 138.2 fib extension of our wave down from the 18 Nov swing high ($5558) to our 25 Nov swing low ($3474). We had a 38.2 fib retracement from that low so looking to reach at least between $2640 and our pennant target is around $2500.
Based on the height of the large pennant , I'm looking for a $1287 drop from around $3782 where we broke pennant support so a pennant target of $2495 for #btcusd.
It seems the major trend line resistance from our ATH , which has already held strong where we started to drop yesterday, might potentially be forming a large falling wedge with our trend line support connecting our November and December lows so the $2500 area might just be a short term bottom. I don't see capitulation happening just yet but only time will tell whether that support holds.
TP 1: $2870
TP 2: $2500
Stop: $3880 (above trend line resistance and 1D SMA50)
Comment:
On a side note, this is my faecebook page called 24 Karat Crypto if anyone new would like to join our small community where we share trading tips.
www.facebook.com/24KaratCrypto/
Twitter: twitter.com/24KCrypto