Hello everyone! Sorry if something on this thread is done poorly, but it's my first publicated idea.
So, I'm a novice in this, but I think people maybe be looking at the head and shoulders pattern on BTC the wrong way. But do correct me if I'm wrong. Shouldn't the neck line be drawed from the bottom previous to the highest high, and the low after that forward? Because it seems people are drawing it wrong, if that's the case, because the low before the highest high, is on 24 of March, everyone is drawing it from the low of 28 of february. Funny thing is, if you draw the neck line from the low of 24 march, the high of 15 june lines up perfectly with a re test of that resistence.
I would like to include an image to go with this, but unfortunatly, as I said, it's the first time I do this and I don't know how to put an image here.
Thanks to everyone in advance for the attention, and feel free to give educational inputs!
Hi Filipe, back at the end of May, I thought this was a H&S pattern too. Its a pretty dramatic looking one if true. But traders who are much more experienced than I am, all told me this wasn't a true H&S pattern & I've come to believe them. Yet everyday for the past couple months you'll see 10 different people saying this is a H&S. Most of the time however i've noticed its from people with low follower counts, IE: newer traders like myself. But if you were to measure from the top of the head to the "neckline", the targeted measured move would take you into negative territory, around -$3500, which of course is impossible. But i'd also say that the right shoulder is messed up looking for a true H&S as well. That higher high, lower high, higher high... I would think you would've preferred to see just a higher high there.
What i've come to agree with however is that since February BTC has formed a series of rising wedges over & over & over again, and that continues to this day, all with the same result, a breaking of the wedges to the downside, over & over again. Which if you look at the RSI over the past 6 months & draw a trendline, whenever the RSI hits that trendline, it precedes that dumpage to the bottom of those wedges, literally every single time for the past 6 months. Which we are at again right now. We're either gonna follow the trend & dump again, or maybe now this time BTC will break thru that RSI resistance line.
I see this whole consolidation period which has lasted 50 days or so, (or what would be the right shoulder in its entirety) as simply 1 massive Bear Flag. The end result would be the same as if this were a H&S pattern, BTC would still be going down from here, but the measured move would bring us under 20k, and not into the negative numbers like the H&S would be.
The supposed neckline however, that orange line, is still a critical area to look at however. As its where this epic battle between the bulls & the bears has been fought. And from the start of May 19th & until June 21st, that horizontal trendline has acted as support. As u see though, afterwards that line has now flipped to some pretty serious resistance. Now when you combine that with the declining volume, all signs point that BTC should break out to the downside. Of course if Market Makers want to move the price up they can, and we would see a massive bull trap ensue. We've had a few small ones this past month & a half, but just imagine the FOMO if BTC broke upwards. Wyckoff accumulation believers would feel convinced & people would be buying it all up, thinking BTC is back. Trap would be set, hook line & sinker.
Sorry for the length of this message, but i just wanted to make those points understandable, so you or anyone else can offer their insights into what ive said there. Regardless of what this is, we're definitely gonna find out what happens pretty soon. Thanks for your idea!
Filipe_Rosario
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@Crypto-Fury, thanks for the input, that is an interesting point of view!
divya1113
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@Crypto-Fury, Appreciate your thoughts. It's all a matter of psychology. We all know that it's a manipulated market where the real players are the whales. We just need to be ready and ride the wave whether up or down, and set your SL depending on your risk appetite. I believe this month or next, it'll be pretty much decided which direction the market is heading.
Crypto-Fury
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@divya1113, Yep... although i would categorize whales as retail personally. When i speak of market makers i'm referring to the various institutions that run the markets in Hong Kong, London or New York whose sole purpose is to move price action around in order to get as much of our liquidity as possible. Idk if you've ever dedicated any time into how they function, but its fascinating at 1st & a must know subject for all traders in this space. Goes into what you say about psychology, as they will use it against you with the candles/patterns they show. Their goal always to induce buying or selling while they generally do the opposite.
Why when everyone freaks out about the rise in short positions, thinking its a bearish sign, in truth its actually quite the opposite & very bullish & vice versa. They use our emotions & psychology against us
Filipe_Rosario
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@Crypto-Fury, actually I agree with you 100%, and one good way to see this is, if you search on google "binance long/short ratio" you can actually see the longs and shorts of retail and compare it with the top accounts, and what you describe is plain as day when doing so, specially if you compare it with the price action
Crypto-Fury
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@filipe_msr_trading, yep..When you see a lot of shorts they've already sold at margin & now have liquidity to open new longs. Or i suppose they could keep on shorting, but eventually they'd run out of supply & can't anymore.
But what i've found to be more useful than long/short ratios is tracking the open interest. For example when something is pumping & the open interest is declining, its a sign that no new contracts are being opened up & theyre taking profits out of the market & an indicator that theres not much strength behind the move. When open interest is going up and price going down it means there are new shorts and and vise versa. I find that to be pretty useful.
This site here uses TV style charts but has one that is an aggregate, so you can see that data across all exchanges. I have it linked to that one here: coinalyze.net/bitcoin/open-interest/ It also has many other pairs & data available. But another site thats full of useful information is: cryptometer.io/ For both sites u really just need to click around to see how much depth it has.
You may even be aware of those sites already, but figured i'd share those because most people i've talked to have never seen them before. Thanks again for your feedback & safe trading!
Filipe_Rosario
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@Crypto-Fury, thanks for that! So, just to see if I followed what you said. If from 11/06/21 de price fell around 11%, but the open interest rose by around 20%, that would be a bullish sign?
divya1113
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Interesting. I wouldn't comment on whether you're right or wrong to draw it that way as I myself very new to TA. But I can tell you that most people posting TA and claiming to be "experts" aren't even sure of their TA most of the time. And some are just trolls. But it's part of the game.
What i've come to agree with however is that since February BTC has formed a series of rising wedges over & over & over again, and that continues to this day, all with the same result, a breaking of the wedges to the downside, over & over again. Which if you look at the RSI over the past 6 months & draw a trendline, whenever the RSI hits that trendline, it precedes that dumpage to the bottom of those wedges, literally every single time for the past 6 months. Which we are at again right now. We're either gonna follow the trend & dump again, or maybe now this time BTC will break thru that RSI resistance line.
I see this whole consolidation period which has lasted 50 days or so, (or what would be the right shoulder in its entirety) as simply 1 massive Bear Flag. The end result would be the same as if this were a H&S pattern, BTC would still be going down from here, but the measured move would bring us under 20k, and not into the negative numbers like the H&S would be.
The supposed neckline however, that orange line, is still a critical area to look at however. As its where this epic battle between the bulls & the bears has been fought. And from the start of May 19th & until June 21st, that horizontal trendline has acted as support. As u see though, afterwards that line has now flipped to some pretty serious resistance. Now when you combine that with the declining volume, all signs point that BTC should break out to the downside. Of course if Market Makers want to move the price up they can, and we would see a massive bull trap ensue. We've had a few small ones this past month & a half, but just imagine the FOMO if BTC broke upwards. Wyckoff accumulation believers would feel convinced & people would be buying it all up, thinking BTC is back. Trap would be set, hook line & sinker.
Sorry for the length of this message, but i just wanted to make those points understandable, so you or anyone else can offer their insights into what ive said there. Regardless of what this is, we're definitely gonna find out what happens pretty soon. Thanks for your idea!