Following the technicals, we have a perfect wick touch on the 61.8 fib, finding support on what was previous resistance. Price has also formed a double bottom with a breach of the neckline, suggesting we've found a meaningful base on the previous daily low, and the market is ready to move to the upside once again.
Then again, a bull trap needs to be considered a possible scenario. I can't rule out the possibility of a larger Head & Shoulders formation until price shows it's able to break and sustain above the $16,000 price level.
My thoughts exactly, if it doesn't happen then I would be surprised!
romanoff2010
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The other scenario is to see the Head&Shoulder Formation plus an obvious divergence, if you put the MACD. If this H&S is valid, then we can expect a retrace back to 9000 area. Just a thought:)
LockNLos
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@romanoff2010, Thanks for sharing your insight! This chart is exciting to follow
romanoff2010
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@LockNLos, you are welcome buddy, I respect your view, as well, and I put it in my box:) Thank you! You know that we're just calculating probabilities, there are only three options; up, down or sideways.
icoeyedoc1stock
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Does the bull trap form because they are looking for liquidity?
LockNLos
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@icoeyedoc1stock, bull traps occur when buyers fail to support a rally past a breakout level, which could be due to a lack of momentum or profit-taking. Bears may jump on the opportunity to sell and send prices back below resistance levels, which can then trigger stop-loss orders from the originally bullish traders and carry on the bearish momentum.
icoeyedoc1stock
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@LockNLos, Nice explanation. It certainly looks like there is very little volume to support this possible reversal. That 16,000 price seems to be a bit of a challenge right now.
romanoff2010
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@LockNLos, ...or maybe just forming at this moment a Gartley in a downtrend, so the big boys can suck some more blood:)