Bitcoin Double Bottom Target in Reach But Failing?

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
The double bottom play i showed a few days ago played out but has not reached it's target yet. A very important factor now is, will it be able to reach the target or not. If it can't move up, it means the market is not strong enough and we can see some panic selling again. The market took some big hits the past few weeks and does not just simply forget that. So when patterns like this start to fail, we can see panic selling happening ( wedge pattern).
So at the moment it's difficult to say what will play out on the short term. We can see a clear trend line on the right and the possible wedge on the left. This wedge says we need one more wave up, but that is not always the case. During extreme weakness, it could simply just drop out of it now. Normally, maybe 80% of the time we would see one more wave up. Just see some weakness at the moment that i am not sure it will happen. Hanging around the support line for a few hours already, usually a sign there is no power to push it up.

Low time frame we have a small range between 4200 and 4300. A break of 4300 could mean the wedge will make that last wave up, a break of 4200 will probably mean what i mentioned above. The target of the double bottom is still around 4600, therefore i though we should have had a bigger correction yesterday to around 4000//3950, make a solid support zone there and make that last move up towards the target. But never went that low and started to move up quickly again. This looks like strength but that is not always the case.

Bigger picture plan i had in mind, was either turning down again from the 4600ish to the 3K levels again, or to make a right shoulder if it would stay above the 4200ish for a big inverse H&S . This H&S is not that likely, because that would mean a V shape low will happen. Indicating the crash mode is already over and done with. Anything can happen in crypto, but i don't think this is very likely to happen. But just being prepared for all options.

At the moment it looks like we have a triangle in the making on the low time frame, this might give a break of the 4200/4300 range. If we get above or below this range, things might get clearer. Alts are not giving any clear signs as well, some look quite good but others did not even move up the past 2 days like ETH'. A few show bull flags in the making while others (like XRP') show bear flags. Like LTC' and NEO' show possible inverse H&S forming, with only the neckline that has to break. So i do not see clear signs yet that the market is willing to make another push up. A break of these bull flags/ inverse H&S would give a much better indication.

For me it means, that if we can not even get above the 4450ish, it will be a bearish sign and probably start to drop again with the high being set at 4400. If we do reach the 4600 it will depend on where the correction down will go from there. At the moment i can not give a long term direction, IMO it would be crazy to even try that. I prefer to do it step by step for the time being. We have at least a solid low now, a good support level around 3500. So even if we start to drop, we could be forming higher lows from now. 3800ish would be a good level to form that higher low. In case we drop big and hard and even break that support, i would probably mean this whole up move was just a big ABC correction (the one i mentioned the past week) and that we see another big drop below the 3500.

So if we move up but price slows down around 4450/4500, the big wedge will probably be in play (blue line). If we break the 4200ish now, the red line might be in play. It might be an important day, which can give us a probable direction for the coming week or so. As i am finishing up this analysis, we have made a small bounce up, which gives the blue line and the trend line from the chart on the right a new chance to succeed.

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Previous analysis:

Comment: If we drop back below the 4250ish, it might be it was NOT a triangle but simply just a bear flag. So the coming few minutes could already give a very good indication on which scenario might play out.

When looking at the volume, it also shows yesterdays rally is loosing strength. So normally only a volume boost could give this more chance to move up

Comment: This is what i mean with the ALts, some look bullish but other do not look that great.

Comment: To give a visualization of the possible inverse H&S. But there is still a very long way to go. A move to 4600 (neckline) has to happen withing the next 24 hours.

Comment: For the short term, there is a possibility for ascending triangles. On the left we can see a smaller one as well. For this to succeed, we need to see a touch close to the high again. So movement like the blue line. If it fails to get close to the high, something like the red line, it will make another drop.

At the moment it's staying close to the resistance of that bear flag i mentioned above. So there is chance it will make a move upwards and invalidate that bear flag

Comment: The first attempt to move up inside the wedge has failed already. Volume was low and therefore not enough support to move higher. At the moment it's at the support zone again. If this breaks, the 4100 might give support again, but i think that might crack. So there is a chance the upwards movement is over already if the 4200 breaks. Still a lot of noise on the lower time frame as we can see with that bear flag. It broke up but dropped again just as fast.

The uptrend support line of Bitfinex is at the same spot as this support line of the wedge we can see here

Comment: These potential triangles can still work out, not likely but if we see a big bounce happen here, than at least we know what is going on

Comment: Dropped to the 4100 and bounced up quite good so far. But this could turn into a H&S if we drop to the neckline again at 4100. If that happens, a target of 3800 gets triggered. If we drop to that level, it might mean very bad news, as i mentioned in my original analysis. That level is support, but depending on the volume and bearish strength of the potential drop, we can make a decent estimate if the 3800 support wil break or not.

Comment: At the moment alts are not dropping yet, bulls are trying to prevent a drop to 4100 again. So it could mean it will fail. But the right shoulder can still take many hours though. We could see one more wave up, but if we see too much strength, it probably means somethings else is going on.

So a max of 4280ish, can still work, but a break of 4300 means it's 80% sure over with the H&S.

If the bulls can fight off this H&S, i don't think we will see any big movements. Bigger picture shows a potential big bull flag (4400/4100). Probably means we keep moving inside of that flag for another day or so.

On the Bitfinex chart we can see the selling volume on these drops have not been that high. When the channel broke there is no panic selling to be seen. This is in favor of the bulls. But all these up movements can still just be a retest of former support. Which is perfectly normal as well. But if we start to drop again, volume has to increase for the bears.

Comment: lol :)

Look at that red line :).
Anyway, the H&S is in play now, as long as we stay below the 4100ish, the H&S is in full play with a target around 3800. At the moment it's doing a retest of the neckline

Comment: Here we can the H&S. At the moment there is not reason to think the target will not be reached. The current 4000/3980 level is e support zone. But don't think it can take the weight of the H&S. The longer the 4000 holds, the bigger the chances become for it to hold. But talking about hours in this case, i do not expect it to hold.

Comment: The 4000 already broke with a small bear flag on the 1min chart, was no bounce at all. Pure weakness! Now the neckline is at 4100, but normally in crypto, we should not even get that close anymore before the 3800 gets reached first. The new reistsance now is around 4000/4050.

If we keep of dropping with this speed, we could be seeing the 3500 the coming days as well. Retesting the big support there, but can't say yet if it will hold or not. Read my primary analysis to see the main thoughts and what just happened. Makes you see things more clearly now of what is going on.

Comment: If we stay above the 3930 now, could mean the target has been reached already. Could move towards 4050 now. Could happen in minutes
Comment: Could be the target has been reached al ready. Just when it looked like making another small drop towards the 3800 a 120 point squeeze happened. We could still see the 3800 getting touched, but i think the speed of the drop might be over already. 4050ish is a resistance now and the 4100 as well. If we break the 4100ish, could mean its over and another scenario is in play.

My best guess now is, might be making a big bear flag between 3850/4050

Comment: This is the possible bear flag i am talking about. But from the looks of it, it might take many hours to complete. Even though the last wave up could be in the making already. But think it might be too soon. If it can not get above the 3980/4000, it will be a very bad sign and could see a continuation of the drop very soon. I personally think it might take a while

Comment: This type of sh.t makes me really sad, this guy is already soooo F rich and for some pocket change (in his terms) he still does this. If this doesn't show greed, i don't know what is. Where is the integrity of people nowadays? :(.

Typical for everything that is wrong with the crypto world and why we are where we are right now.

Just my opinion :)
Comment: As suspected, nothing happened and stil moving inside this potential bear flag. When zooming out a bit there is a potential double bottom pattern being made. If we see a move above the 4020ish and see some kind of bull flag in the making, it could mean the W bottom is in play, which could bring the price towards the 4100/4150.

We broke several important supports during this drop, so my current thought, is bears are still in control, even if the W bottom plays out. Volume could make a difference.

It's weekend, so usually we don't see any action, but that has been different since the 6K broke. So anything can happen. If the 4000 seems to be too heavy, it could mean a fast drop to 3800 or even lower can happen.

Comment: Can see the first attempt to break up with a small triangle it failed, now the second one succeeded and we squeezed up confirming that double bottom and having reached it's target already. Now it's still holding here and anything can happen, but my first thought was, even if we move up here, probably just a correction and going down again. Unless volume tells me something different. Well, i still have to look in to that part :)

There is at least some resistance i am seeing around 4150. So if we break it and make a decent move to lets say 4200 at least, i might be wrong about my original assumption. So far i can see rejection, unless it holds above the 4100 and makes a bull flag out of this.

So watching to see how it goes. This is why planning ahead is so important

Comment: So far still holding above the 4110, so looks like a small bull flag. Now the next step, i don't know. But what hints are there? A break of 4110 is a first small signs of weakness. Breaking the high first small signs of strength. If we break up but only like 30 points or so, could mean it's almost ending and will make a correction (so does not immediately mean a big drop will happen).

Funding is ending in 8 min on bitmex, 0.11% shorts pay longs, its not huge but always plays a part this close to ending. That is slightly in favor of the bulls as well.

So not much to say, expect that staying above the 4110 is bullish and shows bulls are stepping in. But volume is dropping (which is normal in bull flag) but shows buying volume might be drying up.

For the rest, nothing changed on the previous update. Just zooming in here

Comment: It broke that 4150ish, but now just a 30 point up move. If we drop below the 4140ish again, could be bearish. But so far no real conviction yet. Volume is still decent, but i think a small correction is minimal here. This channel usually breaks sooner or later. 4140 and 4080 are support for now.

Comment: I know many people have been looking at this possible inverse H&S for Bitcoin, the one i showed earlier this weak as well. But the fact that we did not reacht the 4500/4600 this week, is already a bad sign. So from my experience these type of inverse (because of that) tend to fail. I would give it like 25% for it too succeed. Today's move is a first step, making a good rally up. There is however still a very long way to go. Even if we break the neckline, the 4600ish level is THE level to break.

So i gave it a decent chance earlier this week, but because the bulls simply failed to reach the 4600, it shows the market is probably not ready for it yet. For now i personally prefer a retest of the 3500 zone and THEN make a new attempt.

A break of 4200 would be a small step and a break of 4300 would be a bigger step towards that inverse H&S. As long as we don't see a break of 4200, i don't see it happening.

Now if we would drop towards 4050 and find support again and move towards the current high, than those chances for the inverse H&S would increase

Comment: So far still below the 4300, but it went higher than i thought. Making a decent shot to make an attack towards that neckline around 4350 of that big inverse H&S. I still think it will fail, but we could get an answer soon. It should stay below the 4200/4210. If that breaks, there is a decent chance that the bulls might make an attempt to break up towards the neckline.

If we do drop from here to the 4120, a small H&S might get triggered if that support breaks. If that happens, i think that bearish scenario will play out. So a drop towards the 3800 or maybe even lower.

Comment: New Bitcoin analysis:


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