Since most don't understand what an ABC correction is or how to visualize it, i have a few examples here in the chart. As you know, my first assumption since the 3200 low an ABC correction up and NOT the start of a long term uptrend. Simply, because i think it's better to judge it on the way up to see how things go first. Before thinking wave C is actually wave 3 of a new impulse wave up.
As you know from my analysis, i am slightly bullish, but only as long as the 3300/3200 zone holds as support. Actually 3300 is my limit, but with crypto and all the noise we have in this market, for a long term trade, stops should be wider.
Why do we see huge dumps when a certain support level fails, like with the 6K? Well it's actually very simple. When buyers get in at a certain important support (6K for example) and are used to seeing the price move up several times. But like with the 6K break, all these buyers, together with the bears who already shorted it and who increase it when the 6K breaks, the volume gets extremely high when an important level like that breaks. That's why we usually see a huge dump because:
1) Bears who shorted (for example) at 6500, they double up below the 6000
2) Neutral people, short when an obvious support breaks
3) Bulls who bought at 6000/6300, start to cut their losses and sell as well
4) Buyers who will buy when the 6K breaks? I can't imagine anyone buying when a level like the 6K breaks, can you?
So what i am trying to show here, when an important level like this breaks, the selling pressure gets much higher than usual. So what we can expect now is, that if the 3200/3300 breaks, we could see a lot of panic dumping again. However, the 3200 is not as strong and obvious as the 6K support was. The 6K held as support for almost 10 months. Now it's only been 2 months.
My only message here with this post is, try to stay open minded and that anything is possible. There are of course also examples where those lows do break. That simply means the market is extremely weak. Whatever happens, volume will show us the direction. If we move up without real volume, it will most likely fail. If we drop without real volume, it will be a matter of time until it moves up again.
Please don't forget to like if you appreciate this :)
Current analysis:
As you know from my analysis, i am slightly bullish, but only as long as the 3300/3200 zone holds as support. Actually 3300 is my limit, but with crypto and all the noise we have in this market, for a long term trade, stops should be wider.
Why do we see huge dumps when a certain support level fails, like with the 6K? Well it's actually very simple. When buyers get in at a certain important support (6K for example) and are used to seeing the price move up several times. But like with the 6K break, all these buyers, together with the bears who already shorted it and who increase it when the 6K breaks, the volume gets extremely high when an important level like that breaks. That's why we usually see a huge dump because:
1) Bears who shorted (for example) at 6500, they double up below the 6000
2) Neutral people, short when an obvious support breaks
3) Bulls who bought at 6000/6300, start to cut their losses and sell as well
4) Buyers who will buy when the 6K breaks? I can't imagine anyone buying when a level like the 6K breaks, can you?
So what i am trying to show here, when an important level like this breaks, the selling pressure gets much higher than usual. So what we can expect now is, that if the 3200/3300 breaks, we could see a lot of panic dumping again. However, the 3200 is not as strong and obvious as the 6K support was. The 6K held as support for almost 10 months. Now it's only been 2 months.
My only message here with this post is, try to stay open minded and that anything is possible. There are of course also examples where those lows do break. That simply means the market is extremely weak. Whatever happens, volume will show us the direction. If we move up without real volume, it will most likely fail. If we drop without real volume, it will be a matter of time until it moves up again.
Please don't forget to like if you appreciate this :)
Current analysis:
