Trying to understand the messiness of BTC - the symm triangle
BTC is consolidating healthily after a ~10% pump two days ago. At that time I also wrote about a false breakout of the rising wedge, and the probability of a symmetrical triangle being formed instead (teal triangle). I believe ever more strongly this is the case. The rising wedge had failed to make it's measured move of 5600, stopping short and double bottoming at around 5800 (giant letter A) followed by a nice strong swing back into a nice bull pole bull flag (giant letter B). Although the top of the pole seems to have put BTC back into that rising wedge, it has since trickled out of it (1) only to tweezer bottom nicely on top of the symmetrical triangle (2) and wicking off the .382 fib. I believe now that the top of the symmetrical triangle (thick green line) will be used as support and resistance.
There are two likely scenarios that will happen in my opinion.
1. We will witness a dead cat bounce, where the bull pole bull flag was a false breakout of the symmetrical triangle. In order for this to be true, price action would have to break down sharply through that support level of symmetrical triangle (thick green line) and test the .50 fib or .618 fib (3). This scenario would not be very surprising as those are pretty common retracement areas after a big swing up, and BTC can still be bullish at this level. However if it fails to hold those levels then we are at the bottom of the symmetrical triangle and would lend more credence to the bears (arrow line down).
2. We will witness a nice hook and go off of the symmetrical triangle. BTC will continue to use the top of the symmetrical triangle as support and resistance, and eventually break out bullishly (squiggly arrow line up) out of the bull flag (4) with a measured move at the 7000 area.
There are two likely scenarios that will happen in my opinion.
1. We will witness a dead cat bounce, where the bull pole bull flag was a false breakout of the symmetrical triangle. In order for this to be true, price action would have to break down sharply through that support level of symmetrical triangle (thick green line) and test the .50 fib or .618 fib (3). This scenario would not be very surprising as those are pretty common retracement areas after a big swing up, and BTC can still be bullish at this level. However if it fails to hold those levels then we are at the bottom of the symmetrical triangle and would lend more credence to the bears (arrow line down).
2. We will witness a nice hook and go off of the symmetrical triangle. BTC will continue to use the top of the symmetrical triangle as support and resistance, and eventually break out bullishly (squiggly arrow line up) out of the bull flag (4) with a measured move at the 7000 area.
Comment:
Scenario 2 played out. BTC had a hook and go!