Bearish Cypher Pattern on Bitcoin with Targets
Bearish Cypher Pattern on Bitcoin with Targets
Hey guys, I have a new update on Bitcoin so let's get to it.
In my last idea, I discussed the importance of the rising black resistance line and the falling purple support line as potential areas for reversal.
Bitcoin tested this line with about 5 candle wicks, but our first sign of reversal was that first drop on the 21st at around 12 (EST). The volume was heavy and the RSI was diverging.
Now that we have confirmation of a solid drop occurring, I noticed a cypher pattern developing here and wanted to share this with you.
Firstly, the Fibonacci retracement of X to A was placed on the top and bottom of the candles, not the wicks. It is okay for the fib to cut through wicks, as long as it isn’t cutting through the body.
I have also added the 1.272 extension which is the bare minimum that point C must reach.
Here is an overview of the points I found in this pattern, with the Cypher requirements in parentheses:
1.) Point B retraces to 0.526 fib of the XA leg (must retrace to 0.382-0.618).
2.) The price at point C extends the XA leg by 1.329 Fibonacci extension level (must extend XA leg by at least 1.272 or within 1.130-1.414.
3.) Point D retraces the 0.782 fib level of XC (must retrace to 0.782)
4.) Point D is where prices are expected to reverse.
5.) Target prices are found between the 0.382 and 0.618 retracement levels of the CD leg.
The volume on the recent drop and the drop we are currently in is quite high and I would expect the price to get closer to the 0.618 retracement of the CD leg.
However, we will keep an eye on this as we always do and check for clear signs of reversal.
Thank you for taking the time to read my analysis, I hope you find this useful!
Hey guys, I have a new update on Bitcoin so let's get to it.
In my last idea, I discussed the importance of the rising black resistance line and the falling purple support line as potential areas for reversal.
Bitcoin tested this line with about 5 candle wicks, but our first sign of reversal was that first drop on the 21st at around 12 (EST). The volume was heavy and the RSI was diverging.
Now that we have confirmation of a solid drop occurring, I noticed a cypher pattern developing here and wanted to share this with you.
Firstly, the Fibonacci retracement of X to A was placed on the top and bottom of the candles, not the wicks. It is okay for the fib to cut through wicks, as long as it isn’t cutting through the body.
I have also added the 1.272 extension which is the bare minimum that point C must reach.
Here is an overview of the points I found in this pattern, with the Cypher requirements in parentheses:
1.) Point B retraces to 0.526 fib of the XA leg (must retrace to 0.382-0.618).
2.) The price at point C extends the XA leg by 1.329 Fibonacci extension level (must extend XA leg by at least 1.272 or within 1.130-1.414.
3.) Point D retraces the 0.782 fib level of XC (must retrace to 0.782)
4.) Point D is where prices are expected to reverse.
5.) Target prices are found between the 0.382 and 0.618 retracement levels of the CD leg.
The volume on the recent drop and the drop we are currently in is quite high and I would expect the price to get closer to the 0.618 retracement of the CD leg.
However, we will keep an eye on this as we always do and check for clear signs of reversal.
Thank you for taking the time to read my analysis, I hope you find this useful!
Trade closed: target reached:
Update: I apologize for the late update but hopefully you guys were following my chart when the price reversed at the .382 fib level. The reversal at this level in addition to the break of the trend line confirms a close of position for those who shorted from point D. I hope this helped you all with your trades. =)