So to start off this idea, let me give you a small lesson about what a descending/falling wedge actually is..
The descending/falling wedge
The Falling Wedge is a bullish pattern that begins wide at the top and contracts as prices move lower.
This price action forms a cone that slopes down as the reaction highs and reaction lows converge.
In contrast to symmetrical triangles, which have no definitive slope and no bias, falling wedges definitely slope down and have a bullish bias.
However, this bullish bias cannot be realized until a resistance breakout occurs.
Now lets move on to the analysis.
We find ourselves within a falling wedge on the 4H chart, This pattern started to form after we hit the price level of $58,000
ever since then we have been in a pretty brutal downwards movement.
The bullish thing about corrections like this, is it lets the market cool off. Corrections are healthy to sustain a longer bullmarket.
analysing the falling wedge, would give us 2 price targets.
For the break up, we would be aiming to take profits on the way up to $53,360
For the break down, we would be aiming to take profits on the way down to $35,760
we can also confirm the pattern by analysing the volume, which since the pattern started to form, has dropped considerably.
If we breakout we will need to wait for a substantial volume supported move, and a retest of resistance/support to confirm it not being a fakeout.
Remember that a falling wedge has a bullish bias, But dont let this be the only reason you take a trade, Look at the big picture!
see you in the next one!
The descending/falling wedge
The Falling Wedge is a bullish pattern that begins wide at the top and contracts as prices move lower.
This price action forms a cone that slopes down as the reaction highs and reaction lows converge.
In contrast to symmetrical triangles, which have no definitive slope and no bias, falling wedges definitely slope down and have a bullish bias.
However, this bullish bias cannot be realized until a resistance breakout occurs.
Now lets move on to the analysis.
We find ourselves within a falling wedge on the 4H chart, This pattern started to form after we hit the price level of $58,000
ever since then we have been in a pretty brutal downwards movement.
The bullish thing about corrections like this, is it lets the market cool off. Corrections are healthy to sustain a longer bullmarket.
analysing the falling wedge, would give us 2 price targets.
For the break up, we would be aiming to take profits on the way up to $53,360
For the break down, we would be aiming to take profits on the way down to $35,760
we can also confirm the pattern by analysing the volume, which since the pattern started to form, has dropped considerably.
If we breakout we will need to wait for a substantial volume supported move, and a retest of resistance/support to confirm it not being a fakeout.
Remember that a falling wedge has a bullish bias, But dont let this be the only reason you take a trade, Look at the big picture!
see you in the next one!