Let’s start by having a mini recap on what happened the past couple of days. On March 18th we continued to decline towards the start of the previous wave (1) in a descending pattern. We hit the bottom of the then BOOM, bulls were back on the scene! FSB brought out a statement saying they do not consider regulations on crypto necessary at this moment in time and we burst above the descending . Then we approached our dashed resistance line (formed from the ATH ) where we hesitated but, of course, bulls followed through. Today, the G20 summit comes to an end and there is a somewhat positive outcome for Crypto Heads. We escaped regulation for now and crypto highlights the flaws in the financial system. In regards to regulation, a review on crypto-assets (as they call it now) is to be completed in July 2018 to see what is needed. Then we will be going through a similar sense of anticipation as we did for G20 Argentina but, for now, bulls will be spurred by the positive outcome from the past two days.
Now let’s look at price action. Since the break from the descending we’ve had three days of strong action. We formed a higher high, broke the dashed resistance line and are heading into the territory of blue 38.2 - of the previous wave (2). The and Stochastics show us a pull back is imminent and these retracement levels are likely levels to pull back from, $9300 being a level we have bounced off 6 times since December. If the 50 acts as support for the pull back, we should be able to keep the momentum going and touch the dotted resistance line in wave 5. This move could be reversed if we break below the dashed resistance line again but the odds favour the bulls now! If were to break below this resistance, it would increase the chances of retesting the and that is where sparks will fly!
For now, let’s see how far into this blue retracement zone we can go! Good luck trading guys!
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Firstly, the $9300 target is still valid as long as we can keep above wave 1 as shown in the chart below at $8660. If this holds then my idea laid out above is the most likely out there based on TA.
If this price doesn't hold, then we could actually have completed 5 waves and we would expect the price to be held within the larger orange retracement levels. Notice how this is still above the dashed resistance line which is important hold!
As our first wave in the broader move was extended (~20% gain) we can expect the last two waves to be of similar size. Here it shows wave 3 as 9.66% gain and our projected wave 5 hitting $9300 resistance will give us 7.21% gain from this point. After drawing a trendline connecting the top of wave 1 and wave 3, we can create a channel and wave 4 hit the bottom of this channel perfectly too!
Because of this, I have placed a trade with 1: 2.75 risk/reward ratio. The target is $9300 and our stop is just below the end of wave 1. If we break into wave 1 then we will negate this whole count which is why placing a stop here makes the most sense.
Remember, this is not financial advice and you should never follow someone else's trade blindly. Do your own research.
With that being said, good luck trading!
If we do break below wave 1 then it would seem we are heading for the orange retracement zone.
Wave 1 in 8.467?