Bitcoin potential correction down to ~20850 (~5%)
Bitcoin is stuck in a trend channel line that first started from the daily high of July 20th. Although trend channel lines are often a continuation pattern, most trend channel lines are broken by a two-legged move to any side, with the first leg covering around 80% of the trend channel line height.
Here, Bitcoin formed a somewhat tight trading range up (at 1H time frame it will be tight; though, in the 15m time frame chart, it looks not so tight), which seems to be the pullback of the prior leg down that, indeed, covered virtually all the trend channel line height. Bitcoin will likely end this tight trading range up correction, as it has overshot the resistance (bar 1), and the pullback retraced to the 20-bar EMA. Also, Bar 1 and Bar 2 formed a Double Top bear flag. Although Bar 2 did not exceed Bar 1 high, it was close, and close is often close enough.
Incidentally, Bar 2 seems to be an EMA Gap-filling bar. The attempt to fill will probably succeed, and the market will continue its correction down. It was also the second bar that penetrated below the prior bar low in the pullback. Additionally, there was also bear sign of strength (support overshoot and resistance undershoot), marked with the red rectangle box, but that is irrelevant. The point here is, Bitcoin will likely correct down to ~20850 (or around ~5% down), before there is a potential major bull leg.
Here, Bitcoin formed a somewhat tight trading range up (at 1H time frame it will be tight; though, in the 15m time frame chart, it looks not so tight), which seems to be the pullback of the prior leg down that, indeed, covered virtually all the trend channel line height. Bitcoin will likely end this tight trading range up correction, as it has overshot the resistance (bar 1), and the pullback retraced to the 20-bar EMA. Also, Bar 1 and Bar 2 formed a Double Top bear flag. Although Bar 2 did not exceed Bar 1 high, it was close, and close is often close enough.
Incidentally, Bar 2 seems to be an EMA Gap-filling bar. The attempt to fill will probably succeed, and the market will continue its correction down. It was also the second bar that penetrated below the prior bar low in the pullback. Additionally, there was also bear sign of strength (support overshoot and resistance undershoot), marked with the red rectangle box, but that is irrelevant. The point here is, Bitcoin will likely correct down to ~20850 (or around ~5% down), before there is a potential major bull leg.
Trade closed: target reached:
This was a late update... Anyways, if you shorted, and were not trapped out, you would have yielded ~5.3% profit (if I remember correctly). The low was ~20760, which sufficiently went below the 20850 TP order, and you would have taken your profit if you shorted.