DrDovetail

Yesterday's red doji was indeed a reversal sign.

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
As I said in my last idea 4 hours ago...even though the price action of yesterday's candle did exactly as I predicted it would while forming another encouraging higher low/higher high combo(which is great for an ongoing bull trend), it also formed a red doji , coming off of a bullish pattern which usually signals a reversal and leads to at minimum a temporary dip of consolidation/retracement. Which is what we are seeing now. keep a close eye on volume , rsi , mac d, and any sort of gaps down(fortunately no gap down) on the current day's candle to signal whether or not we're in for a dip or not. If so pull out as much as you're comfortable with and get ready for the next bounce. we are still potentially in this descending wedge , the very last tip of it in fact so there's a chance it may just bounce right off the bottom of the wedge without actually having to drop much in it's price range and bounce high enough to break out of the top of the wedge and continue it's bull run...currently the price has slightly bounced off an old support line of the 200 SMA (purple line) and hopefully it is just wicking down....it hasn't reached the bottom line of the descending wedge yet so it's still too early to tell if it will go below that, but even if it does that could potential be just a wick once it closes as well....on the flip side if it's looking like this candle turns into a bearish engulfing candle I'll be taking out all of my btc             and waiting for the price to correct before jumping back in.I will be watching the 200SMA(purple line) and bottom trend line of the descending wedge to see if I can find a good support zone . ...just be prepared for whatever happens, choose wisely, and make your own decisions as this is not financial advice ;)
Comment: Currently bouncing off of the purple line let's see if it continues the next time it tests it.
Comment: It's been wicking below the purple line a few times but just below that we have a backup reinforced line of support of both the bottom descending wedge trendline which is now overlapping the 78.60% fib extension line. For now at least it hasnt touched those 2 lines of support but they should make for some reliable backup considering theyv'e both acted as support recently.
Comment: For now, today's lines of support definitely appear to be the top and bottom lines of the descending wedge pattern.
Comment: Turned out my original call was exactly where yesterday's candle closed with the ultimate support of yesterday's candle being the 200 SMA(in purple) and it's ultimate resitance being the top trendline of the descending wedge trendline (in green). We may very possibly see a couple to a few more lower low /lower high retracement candles, but it's also possible the retracement could already be over, The real test is that whenever the retracement is over and we go back to a series of higher lows/higher highs, whether or not it starts higher than what it was when we first began our last series of higher low/higher highs (which was from the recent bottom) I'm confident we will see a series of higher highs and lows before it reaches that bottom point, and if we do in on this very next candle that will be big because that means we will close above the green descending wedge, with the possibility of it being a breakout. I think it most likely will have one more lower low/lower high candle at least and if so this candle will likely continue to have the descending wedge as it's line of resistance and probably the purple line or the bottom wedge line as resistance. I would much rather it is done with the slight retracement and it instead blasts off and skyrockets out of the descending wedge. We shall see As always do you I'm playing it conservative until I see it break up out of the wedge, closes above it and then has a candle that closes the day after with a higher high/and higher low.
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