Yesterday my short setup started doing pretty well, but when I woke up the price immediately pumped and reached the entry level. Today I decided to close my short at the entry because now the Bitcoin is not forming the wave 5 according to the trading chaos approach. Moreover I missed the order block at $15800 and it’s understandable why price pumped from there.
Let’s take a look at the 1h time frame of the BTCUSDT chart of the WhiteBit exchange. Here we can see that the price broke the wave structure of the wave 5 and decided to form my unfavorable structure – flat correction inside wave 4. I missed the fact that wave 2 cannot be represented as a triangle, one clever man noticed it and wrote the comment below the previous analysis in TradingView. Thank you, bro!
Now it is clear that the price is forming the wave C. I always have 5 waves and now Bitcoin finished the wave 1 and probably 2. I opened long position with the target at 18k because the price has reached exactly the 0.61 Fibonacci retracement – the original target for the wave 2. Wave 3 should not be too long and I suppose it will be finished at the minimal target zone – 1 Fibonacci extension.
After that we have to find the divergence on the local timeframe between waves 3 and 5 inside C and trade the last bearish impulse.