Time To Lock In Profits - 3D RSI Shows +30% Correction Imminent
Looking at 3D RSI from last cycle. There were 5 times RSI hit the red box and Two times it didn't get that high (yellow circles). Each time there was a 30% or greater correction in price. This chart starts with the first big spike that "ended" the bear market of 2015. Each time, except the green outlier which occurred during the parabolic phase, we went back down to the blue support box. That box then flipped to resistance in the bear market. We are now back in a bull market (as is shown by the 3D RSI) and have pushed into the red resistance again. If markets repeat themselves, at some point we should have a 30-40% retracement. From what price, that is the magic question. Also, Looking at the structure of the RSI inside of the Red box, 3 times it dropped straight back down HARD (orange) and 2 times it had a double top (red). What will it do this time (blue)
Comment:
Comparing past RSI and price movements, I have found one that looks to be similar to what we are currently experiencing. Looking at the two Orange boxes we have the following similarities:
RSI:
1-RSI hits red box
2-Bearish Divergence takes place (Price Climbs higher however RSI drops and peaks inside the purple box) at the same level
3-Price follows Bearish Divergence and falls roughly 40%
RSI:
1-RSI hits red box
2-Bearish Divergence takes place (Price Climbs higher however RSI drops and peaks inside the purple box) at the same level
3-Price follows Bearish Divergence and falls roughly 40%
Comment:
In reviewing the price action and RSI Action as well as time frame, I have grabbed two different sets of candles to compare to current action. The past doesn't predict the future however I feel it is wise to learn from the past.
Both saw RSI divergence as price continued higher but the RSI started to cool off. Both corrected down approximately 40% in price. Both saw massive gains following the correction.
Yellow (April-July 2017): The parabolic rises leading to 240% gain in BTC was quicker then current price action and the pullback was very sharp (12 days). This scenario would takes us into the golden pocket and we would see a bounce off the estimates position of the 20 week MA (black dotted) and just before the projected 3 day 50/100 MA bull cross.
Blue (July-Sept-2017): Again the 170% rise in BTC was quicker then the current price action however it takes longer to correct, a full 36 days. This scenario would result in a bounce off the golden pocket and probably land us directly on the projected 3 day 50/100 MA bull cross.
I think the Blue setup is more likely due to time/space/price action.
Both saw RSI divergence as price continued higher but the RSI started to cool off. Both corrected down approximately 40% in price. Both saw massive gains following the correction.
Yellow (April-July 2017): The parabolic rises leading to 240% gain in BTC was quicker then current price action and the pullback was very sharp (12 days). This scenario would takes us into the golden pocket and we would see a bounce off the estimates position of the 20 week MA (black dotted) and just before the projected 3 day 50/100 MA bull cross.
Blue (July-Sept-2017): Again the 170% rise in BTC was quicker then the current price action however it takes longer to correct, a full 36 days. This scenario would result in a bounce off the golden pocket and probably land us directly on the projected 3 day 50/100 MA bull cross.
I think the Blue setup is more likely due to time/space/price action.
I also am showing a Schiff PF (black lines) that starts from the low of 2015 with outsides from 6k drop to 3k bottom. It shows we have triple topped at the upper boundry and if we fall to the median, that would be just over 30%.