Hello my friends and family of sweaty nerds!
Remember that feeling - when you first began trading. Babypips, the studying, the determination, the discipline. You pulled open that beautiful compounding calculator and you hyperventilated believing that within a few short weeks of consistent "Risk Management" and only needing to "win 6/10" trades with an "eM0t1Onl3s$' attitude you would swimming in the Bahamas with your private jet, bitches on your big ass yacht and a mansion the size of the Vatican. Lol - good times...
Anyway, I have been analysing Bitcoin lately and instead tried to analyse the bigger picture, going back to my fundamental technical psychological-igical basic techniques from baby pips (that don't actually work properly but seem to historically) and analyse the graph. One quite obvious observation is that Bitcoin has been playing ping pong and the table is getting shorter. A pennant or a symmetrical triange? Well, both (or you decide).
Here is an explanation for both:
Difference 1: The Flagpole
Both the symmetrical triangle and the pennant have conical bodies formed during a period of consolidation. Price consistently reaches higher lows and lower highs, creating two converging trendlines that form this conical shape. However, the pennant includes a flagpole at the beginning of the pattern, which is not present in the formation of the symmetrical triangle. The flagpole is a very important characteristic of the pennant and is created when price suddenly spikes or dives dramatically in the direction of the current trend, forming an almost vertical line. This sharp move is accompanied by heavy volume and marks the beginning of an aggressive move within the current trend. Price then pauses, forming the body of the pennant, before breaking out in the direction of the trend with renewed vigor.
Difference 2: Duration
A second difference between the symmetrical triangle and the pennant is their durations. The pennant is considered a short-term pattern that forms over a period of days or possibly weeks. Ideally, a pennant pattern lasts between one and four weeks. A triangle pattern can take much longer, sometimes forming over the course of months or years. In fact, if a pennant pattern drags on into its 12th or 13th week, it is usually considered to have become a triangle.
The breakout after a pennant pattern should occur at or near the point where the trendlines converge, called the apex. When dealing with a symmetrical triangle, however, it is optimal for price to break above or below the trendlines one-half to three-quarters of the way through the pattern. This means the pattern often never reaches its apex, forming a flat-topped cone rather than an actual triangle. A breakout is eventually forced one way or the other as price nears the apex. However, a breakout too early or too late may be indicative of a weaker pattern and a less robust continuation.
Another observation is that Bitcoin has recently broken out of this symmetrical triangle and successfully retested the trend line. It has now made a long impulsive move. What does this usually mean? Well, it means go long.. right? Not really. Just because we observed a breakout, it does not mean it is going to be an largely projected one. There is little means for it. Now, when you go back to your technicals, I do understand that the projected price level is usually the same distance as the first retracement in your wedge pattern. This is not true for Bitcoin as I believe that the price increase is linear to the decline of trust in the coin. As the price goes up of the coin, the trust in the coin goes down - it essentially becomes psychologically too overvalued to justify a price increase. I believe we may instead see a logarithmic projection as stated by some other amazing traders on this network. We will see.
The future is an interesting one everyone. <3 Seb
Remember that feeling - when you first began trading. Babypips, the studying, the determination, the discipline. You pulled open that beautiful compounding calculator and you hyperventilated believing that within a few short weeks of consistent "Risk Management" and only needing to "win 6/10" trades with an "eM0t1Onl3s$' attitude you would swimming in the Bahamas with your private jet, bitches on your big ass yacht and a mansion the size of the Vatican. Lol - good times...
Anyway, I have been analysing Bitcoin lately and instead tried to analyse the bigger picture, going back to my fundamental technical psychological-igical basic techniques from baby pips (that don't actually work properly but seem to historically) and analyse the graph. One quite obvious observation is that Bitcoin has been playing ping pong and the table is getting shorter. A pennant or a symmetrical triange? Well, both (or you decide).
Here is an explanation for both:
Difference 1: The Flagpole
Both the symmetrical triangle and the pennant have conical bodies formed during a period of consolidation. Price consistently reaches higher lows and lower highs, creating two converging trendlines that form this conical shape. However, the pennant includes a flagpole at the beginning of the pattern, which is not present in the formation of the symmetrical triangle. The flagpole is a very important characteristic of the pennant and is created when price suddenly spikes or dives dramatically in the direction of the current trend, forming an almost vertical line. This sharp move is accompanied by heavy volume and marks the beginning of an aggressive move within the current trend. Price then pauses, forming the body of the pennant, before breaking out in the direction of the trend with renewed vigor.
Difference 2: Duration
A second difference between the symmetrical triangle and the pennant is their durations. The pennant is considered a short-term pattern that forms over a period of days or possibly weeks. Ideally, a pennant pattern lasts between one and four weeks. A triangle pattern can take much longer, sometimes forming over the course of months or years. In fact, if a pennant pattern drags on into its 12th or 13th week, it is usually considered to have become a triangle.
The breakout after a pennant pattern should occur at or near the point where the trendlines converge, called the apex. When dealing with a symmetrical triangle, however, it is optimal for price to break above or below the trendlines one-half to three-quarters of the way through the pattern. This means the pattern often never reaches its apex, forming a flat-topped cone rather than an actual triangle. A breakout is eventually forced one way or the other as price nears the apex. However, a breakout too early or too late may be indicative of a weaker pattern and a less robust continuation.
Another observation is that Bitcoin has recently broken out of this symmetrical triangle and successfully retested the trend line. It has now made a long impulsive move. What does this usually mean? Well, it means go long.. right? Not really. Just because we observed a breakout, it does not mean it is going to be an largely projected one. There is little means for it. Now, when you go back to your technicals, I do understand that the projected price level is usually the same distance as the first retracement in your wedge pattern. This is not true for Bitcoin as I believe that the price increase is linear to the decline of trust in the coin. As the price goes up of the coin, the trust in the coin goes down - it essentially becomes psychologically too overvalued to justify a price increase. I believe we may instead see a logarithmic projection as stated by some other amazing traders on this network. We will see.
The future is an interesting one everyone. <3 Seb