Bitcoin BUY TIME! And a lesson on H&S patterns.

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar

Real quick.

Here's is the inverse H&S pattern that the masses on TV were spotting.

The right shoulder that had formed (first one) looked good at the onset, but was not confirmed by volume . Thus, you will read in my last several posts, I was skeptical that it would give the bulls the strength needed to pass though massive overhead resistance. My skepticism has been confirmed over the past several days and I have been rewarded nicely for my sell at around 11k.

We have now entered into my projected buy zone where I have begun my buy back of BTC and have now re-positioned myself nicely for a bounce here off of the 200 day moving average.

You will see a second shoulder has begun to form. This is the correct shoulder. Although, not fully formed yet as we are missing the second half (our upwards movement), it IS confirmed by massive volume!

We can now project the upward price movement with greater certainty. Although, there still is MASSIVE overhead resistance, the bulls may have gained enough coiling tension with momentous downward movement (again confirmed by volume ) and a predicted (at the time of this writing) bounce near the 200 day moving average, to propel us upward though our numerous overhead resistance ceilings.

A reanalysis will be made by me at the top of our BLUE descending channel and again at the second RED neckline.

If the bulls are able to gain enough momentum to break through our second neckline and final resistance point at around 11.7k, they should carry us northwards all the way past the 17k mark.

Again, reanalysis will be made and updated at important junctures along the way.

Happy trading friends.

Comment: I anticipate a gentle landing into our buy zone. Then a touch and go!

I am growing increasingly bullish as I see all the "pro" bulls have suddenly now turned into bears. As always, the contrarian in me wants to rebel. In this case, that desire is not a negative trait. Buy into the fear. Sell into the strength. That strategy has been working quite nicely as of late!
Comment: *Sell the greed. NOT the strength.
Trade closed: target reached:

TARGET AREA reached. I expect a bullish reversal tomorrow or Saturday as this short 35 day cycle comes to an end.

TARGET has been adequately reached. Last night we saw what I think will end up becoming the final impulse of selling volume for a few weeks at least. Now we should move up and begin to form that inverse right shoulder. This, again, becomes the correct shoulder, confirmed by volume.

First target = Upper BLUE channel(s) trendlines.

New triangle I had anticipated can now be drawn. Yay!
35 day cycle I had alluded to almost complete. Get ready!

And she's off!

Triangle held as expected. Spending a little more time down here in this buy range is a good sign. It is better than a touch-and-go on the 200.
When do you see the bottom 4-5k taking place?
@Saylo, Another good question. I would say that the 4-5k bottom is more likely should we remain in the BLUE channel(s) I've outlined. If we break above the BLUE channel as I am anticipating we might do in 7-10 days, the 4-5k bottom can almost be ruled out.
+2 Reply
janjnv phil.steuerwald
@phil.steuerwald, @Saylo
Here is a clear 3K bottom, everything depends on the timeframe and the chart scale.

Personally I don't trade short term and I'm not a fan of overcomplicated TA and shampoo patterns! Crypto markets are way too unpredictable and way too volatile on short timeframes.
@janjnv, Define "short timeframes". I'd agree with you but my definition of "short" might differ from yours. I don't think it's too difficult to spot patterns which target weekly zones. But, I definitely would not attempt to day trade crypto. Also, I don't disagree with your chart necessarily. However, the inverse H&S shoulders is now giving us a clue that, for the short term at least, we could target as high as 17k. This will need to be re-evaluated at the top of my BLUE channel of course, but it is a possibility. If we don't break the BLUE channel, I'm with you. We go to $2-4k as I've stated numerous times all along.
+1 Reply
janjnv phil.steuerwald
@phil.steuerwald, Weekly targets as you mention them would be a minimal timeframe from my perspective, so any timeframes below 1D charts are way to risky, I would go for lower than 1D only to increase resolution in order to enter positions that are confirmed and charted on a daily scale minimum.
I'd agree it's not too difficult to spot patterns and price directions, the much harder part is calling tops and bottoms (or setting your TPs and SLs if you will) many ignore this.
@janjnv, Also, for what it's worth, your chart shows the same. That we could go as high as 17k before hitting our heads on your long trending ascending line and coming back down. In other words, I am not insane to suggest the possibility. Thanks for your comment.
+1 Reply
Re your comment, a rich man once said “Be fearful when others are greedy and greedy when others are fearful.” I have a feeling that the time to be greedy is yet to come. I still see many bulls around. When most turn into bears, I will turn into a bull. It might be when the price drops to 7800-8500 range.
@hkh222, yes that's true. But no reason you shouldn't play the bounce here (however, big that turns out to be) on the way down. I've been playing every bounce on the way down to $4000 (where I think we're eventually headed) and making money all the way down while most are losing. This, without shorting. No reason you can't be periodically bullish while overall sentiment remains bearish.
cI8DH phil.steuerwald
@phil.steuerwald, I do that all the time. But the risk is too high if you can't catch it at a good price.This time the bounce seem to be weaker than the precious ones. I expect a nice bounce once this bear flag completes (perhaps between 7800 and 8500).
@hkh222, I meant when we reach the bottom of this bear flags pole (if it ever turns out to be a bear flag)
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