I mentioned in the last update of my previous post that we were potentially forming an and that we needed to watch the resistance, $3600 and because if we broke above the , we would probably break above the neckline. Well we broke through resistance with and the played out, although we never needed the full 38.2 fib retracement to form the right shoulder and give it juice.
My target remains around $3900 but I'll be reducing this slightly from my previous $3950 target because of 2 converging which I believe will guide Bitcoin towards it's ultimate launchpad as we drop lower into the channel we have been printing. The converging support starts from our Q3 swing low and support fits snug with our recent trending support which has been holding since 25 November. The converging resistance starts from our 15 October swing high and acted as support for our 15 November swing low when were still above $5k.
, , etc are all overbought on the higher time frames and selling is drying up slowly so expecting strong resistance around $3900. We should also find resistance at our daily SMA30 which is very close.
Our temporary bottom target does change slightly with the recent upwards correction. If you look at our drop from $5658 to our channel support $3473, you will see that we had a 38.2 fib retracement on the following leg up to channel resistance which gives us a 138.2 target of $2640. On the next drop from channel resistance around $4409 to our 14 December recent swing low ($3122), we again should have a 38.2 fib retracement (not sure it will reach 50 fib) which again gives us a 138.2 target of $2630.
I think we should reach this target before finding a temporary bottom since these fib extension targets correlate so well.
I think once we reach $2630/ 40 , we should have a break from the converging apex and a strong move above the to the upside. I think we still need one last big move down so that the will print a larger .
Good luck and happy trading!
Previous update's inverse H&S: