Potential Drop Incoming for BTC (Part 2)
Hi guys, just updating my previous idea.
I’m still calling for a drop, just like I have been but since the head and shoulders formation failed (surprise surprise!) I am seeing more of an M formation emerging.
But I have also discovered a fractal that might help give us some guidance on where the price is headed. The fractal I have on the chart is a bar pattern that I copied from the 7.3k jump and subsequent fall that began on March 18th. This bar pattern has been slightly modified to fit the recent price action, but it’s still nearly identical to the original and besides fractals are used to help figure out the waves we expect Bitcoin to take… not to determine exact prices or dates.
As I mentioned in my last update, the .382 fib level has been providing strong resistance and this level still is. If we do indeed fall, I’ll have to reverse the fib chart but for now I’m keeping it the way it is since we started the bull run.
Another point of resistance I discovered is another trend line which is local resistance formed from 9.8k down to the recent highs. It probably doesn’t carry too much weight, but if price action follows the fractal, we would expect this trend line to keep price suppressed and even see the reversal begin here. A drop from this point, rather than the alternate that I describe in the next paragraph, would be a great way for the whales to throw everybody off who are all awaiting the reversal to happen at that main red trend line above.
The alternative scenario (shown with green arrow) if this fractal doesn’t work out, is for the price to continue to rise to the major resistance line (in red). This resistance is the strongest of all, formed from the ATH 19.7k down to 11.7k and as I’ve mentioned before has kept Bitcoin stuck in this bear market. A test of this resistance would be the most likely scenario, but again the whales might try to throw everybody off and have the drop start elsewhere.
So if we start to free-fall, then our first point of support will be around 7.3k or the .236 fib level. Funny how the fractal happens to show price going sideways right at this fib level ;)
Now obviously price action never follows fractals perfectly, but if it follows the general path then we should see it bottom out right around 5.9k to finally form that double bottom that so many bears were waiting for.
Hope you guys found this update useful! =)
I’m still calling for a drop, just like I have been but since the head and shoulders formation failed (surprise surprise!) I am seeing more of an M formation emerging.
But I have also discovered a fractal that might help give us some guidance on where the price is headed. The fractal I have on the chart is a bar pattern that I copied from the 7.3k jump and subsequent fall that began on March 18th. This bar pattern has been slightly modified to fit the recent price action, but it’s still nearly identical to the original and besides fractals are used to help figure out the waves we expect Bitcoin to take… not to determine exact prices or dates.
As I mentioned in my last update, the .382 fib level has been providing strong resistance and this level still is. If we do indeed fall, I’ll have to reverse the fib chart but for now I’m keeping it the way it is since we started the bull run.
Another point of resistance I discovered is another trend line which is local resistance formed from 9.8k down to the recent highs. It probably doesn’t carry too much weight, but if price action follows the fractal, we would expect this trend line to keep price suppressed and even see the reversal begin here. A drop from this point, rather than the alternate that I describe in the next paragraph, would be a great way for the whales to throw everybody off who are all awaiting the reversal to happen at that main red trend line above.
The alternative scenario (shown with green arrow) if this fractal doesn’t work out, is for the price to continue to rise to the major resistance line (in red). This resistance is the strongest of all, formed from the ATH 19.7k down to 11.7k and as I’ve mentioned before has kept Bitcoin stuck in this bear market. A test of this resistance would be the most likely scenario, but again the whales might try to throw everybody off and have the drop start elsewhere.
So if we start to free-fall, then our first point of support will be around 7.3k or the .236 fib level. Funny how the fractal happens to show price going sideways right at this fib level ;)
Now obviously price action never follows fractals perfectly, but if it follows the general path then we should see it bottom out right around 5.9k to finally form that double bottom that so many bears were waiting for.
Hope you guys found this update useful! =)
Comment:
Not sure why I said it didn't exactly work out last time for the 4hr RSI bearish divergence on 4/15. It did work out and led to a nice dump, but it wasn't as big as I was expecting is what I meant. Let's see if there will be another one coming up. Switch to 4hr and you'll see what I'm talking about
Comment:
Looks like there could be a shark harmonic pattern taking shape:
Right now the more likely scenario now is the alternative one I had mentioned above, which is following the green arrow up to the most important trend line of all! I wouldn't be surprised to see the price surge up to that point by tomorrow.
It seems like a lot of people are now waiting for a break of 8450 which was the recent high. I think a lot of people will buy in once the price breaks through there and with that trend line right above it, would create the perfect opportunity for whales to dump. Why not dump it right after a whole bunch of people buy in?
In the bullish scenario, what we need to see is over the next couple of days is a break through the red resistance trend line with conviction before opening longs. A hold above this line is critical.
Until that happens, I will remain bearish since we are still in this bear channel from the ATH. Yes it is conservative, but there is just no way I'm buying in this range. I would much rather wait for bullish confirmation.
Another thing I want to point out, is if you look on the 4hr TF you can see the RSI has a decent amount of room to still stay below the previous high. There's a possibility of a 4hr bearish divergence showing up once again. I know it didn't exactly work out last time, but look what happened from 4/07 to 4/09 on the 1 hour time frame. The first RSI divergence didn't lead to a dump right away, there was a second one that follow right after it and then the price finally dumped. So there could be a similar situation playing out here.
For now, I continue to sit on the sidelines and keep a close eye on things. I've been bearish for months but have no issue switching to bull if it makes sense to do so.