So, I really hate to be so negative but when I look at the weekly BTC price charts on both Bitfinex and Coinbase I see continuation patterns forming. I feel that the period BTC has been in since early December has been more of a pause to consolidate before continuing lower rather than building a base at a bottom. Before continuing I want to say that even though to me it looks as though there is a chance BTC may go substantially lower I still remain bullish on cryptos long-term (years). I just feel that it is going to be months, possibly a year or more before we see a major bull market again. Believe me, when I say that I would like nothing more than to be proven wrong. I hate the thought of the crypto that I do hold (at a substantial loss at this point) dropping even further.
Unfortunately, looking at the Bitfinex weekly chart though I see a very clear symmetrical triangle or pennant in the process of being formed. Symmetrical triangles usually form during a trend as a continuation pattern and since it started forming after the huge drop BTC experienced in November/December, I would have to conclude that the odds are for a continuation to the downside. One question would be then, how far to the downside? I guess it would depend on how you define the pattern. If you look at it as a bearish pennant then it is possible that there could be a drop equal to the original flag pole, which would be a substantial drop ($3285 by my calculation). If you look at the pattern as a symmetrical triangle forming during a bearish trend, then you could simply take the price distance at the widest point (around $1200) and subtract that from the breakdown point to give you a possible target.
Looking at the Coinbase chart I see a bearish ascending triangle pattern forming, also a continuation pattern. I would estimate that the downside targets for this pattern would be similar to the Bitfinex chart. What I will be watching for is for these patterns to continue to form, possibly a move higher from where we are now up to the upper resistance trend line before a reversal back down to the support line.
What I feel would negate these patterns would be if there was a substantial downside break outside of the pattern without any substantial continuation. Say if BTC broke to the downside outside of the pattern but the low of the flag pole around the $3100 to $3200 area held and BTC recovered and moved higher. I would then have to reassess the whole pattern and the possibility that the $3000 area may well be a bottom or close to it.
dont get stuck on flag poles... first btc needs to climb to 6k so i can get out...
Bigsky_Crypto
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@BlockchainYahoo, LOL, at some point BTC will test that old support area which now should be a pretty strong resistance level. I will be doing some selling there as well.
demoxbt
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Looks like this alt will be safe to stay into because of the technicals on it while bitcoin goes down!
Bigsky_Crypto
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@agruener, I agree, I like this alt for both technical and fundamental reasons and have been mining it on and off for about six months now. I also like RVN.
DU09
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Sound analysis. I am a bit skeptical about reaching 1k, I think it is likely we will test 3k again or 2.8k before any sustain up-trend.
Bigsky_Crypto
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@DU09, Thank you, although I feel like we will see another leg lower, I am hoping that it will not be as massive as last Novembers 45% + drop.
I would love to be wrong and see 3k hold. Thanks again for the comment.