As expected, Bitcoin's short-lived rally had short-lived volume to follow through after its big jump on 6 Jan. The bullish inverted head and shoulders has been invalidated, and the bear flag has ultimately failed. It looks like we have a head and shoulders pattern playing out with the right shoulder currently printing as we speak. If we break the neckline support at around $3880, then I'm expecting a +- $160 drop with the target from the neckline being the height of the head from the neckline, which takes us to a short term target close to our $3730 horizontal support to form yet another bart pattern and will bring us back below our SMA50 on the 1D, as has happened on quite a few occasions in the past 6 months where we briefly breach our SMA50 on the 1D then reverse shortly after.
For the mid term, my trade target covered by my previous 2 posts is still active, with a bottom target of $2640.
Previous posts:
Comment
⋅
**Edit: Bull flag not bear flag
Comment
⋅
Looking at the Bitfinex longs and shorts. Shorts have dropped from 34k on 2 Jan to 23k today. Shorts closing should mean upwards pressure on price and this is not happening. Longs have increased from 25k to 35k since 27 December until today (currently 33k). During this time, the price has stagnated at just under 4k so with this buying pressure coupled with short covering, shouldn't the price have already gone up?
This looks to me like the perfect trap for retail!
@kkamauu, difficult to say at this stage. Personally, I'm leaning bullish for now with a stop at $3620 so this could be a buy around $3730 but to be safe you can buy above $3800 (on Binance) once get above the daily SMA50 again.
kkamauu
⋅
@cryspo, any thoughts now? wondering if i should buy back in or just wait
Corn_Reaper
⋅
@kkamauu, not a bad place to buy in for a short term retracement, it looks like $3600 is holding on Bitstamp and we're oversold so think we'll retrace back to $3735 - $3807 (38.2 - 50 fib retracement) and potentially retest our daily SMA50.