Corrupt_Economy
Long

Symmetrical Triangle - 5.6K or 7K?

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
Ok, so we are now forming a potential symmetrical triangle. Based on the height of the pattern, we could expect a breakout to take us to 7K and just above the long term downtrend resistance line shown in purple. A break to the downside would take us to 5.6K which is where we find support as indicated by the grey line formed by connecting the lows of 06/02 and 24/06.

It is worth noting that this price action is occurring within the long term bullish descending wedge pattern indicated by the purple lines. As we are getting closer to the apex of this pattern, we are seeing a decrease in downside momentum which is usually an alert of an upcoming trend reversal.

How to trade this? Short term I would expect move up from here and hit the resistance line of the symmetrical triangle somewhere between 6350 and 6400. I will go long from 62XX to 6350-6400 as I believe this scenario is very likely to play out.

Longer term, whilst it is entirely possible we go lower to 56XX, given the decrease in downside momentum and the fact that the last two times (around 28/07 and 05/09) we hit the long term descending wedge resistance we haven't fallen all the way to the bottom support of the wedge ; I would give a bullish bias to the situation. It is also worth noting that generally speaking (though not always!) towards the end of a descending wedge ; we won't see the price go below the last touch point of the lower resistance line. This was on 24/06 at around 5760, so I don't really see us going lower than that. We also have the rising pink support line which is indicated by the higher lows of 24/06 and 13/08 which gives us an alternate low of around 6K. Given these two considerations it just doesn't make sense for us to go much lower than 5800. This in turn, invalidates the target of 5.6K for a downside break of the symmetrical triangle; meaning a break to the upside is more likely.

To confirm, I am long from 62XX to 6350-6400. I will add to my longs if we go lower. I will reassess once we reach this target, though I have a bullish bias for a break to the upside of the symmetrical triangle. As we get close to the day a break occurs, I will reassess and adjust if necessary.
Comment: Not too much to update, having a look here at the one hour chart you can see we have moved above the 50 MA (green) and it has held as support. I suspect it is likely we will shortly make our move up to test the resistance of the 100 MA (red). From there we might run just below the 100 MA for some hours before at least wicking up through and testing the resistance of the triangle. This is our target for longs set in the 62XX range. For a more risk adverse approach, take profit at around 6395 which is just below where we meet the 100 MA resistance.
Comment:
Comment: Note, as we only have two touches of the lower support of the triangle; there is also a pretty good chance that we touch go lower and touch this support line before advancing up. I have longs set to buy around the 6230 mark in case this happens to increase my position.
Comment: As per the above comment, down we go. I expect we will touch around 6230ish. This is good as it gives us our third touch of the support and will make it easier to break to the upside once we start our ascent as indicated by the green arrow.
Comment:
Trade closed: target reached: Thanks to the stop hunting action, my buy orders at 6230 were filled and then sold at 6460. As mentioned in the op above, I have a bullish bias for the current situation; however now that my short term trades are complete I will re-assess where we are at and look for my next entry and share soon. Cheers
Comment:
man this crap makes my head hurt
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