Hello everyone,
Before sharing the harmonic patterns forming/formed in altcoins, I wanted to share with you my BITCOIN analysis. Because everything happening in cryptocurrencies tied to BTC.
A few weeks ago, I detected a Bearish CYPHER pattern in the weekly chart of BTC. The pattern completed on August 1st and BTC sold off very aggressively subsequent to the pattern completion. This means two things: 1) As a newbie, I am getting better at harmonic analysis. 2) This BEARISH CYPHER pattern should be taken seriously.
Right after the aggressive sell-off, bullish trend wanted to continue and tested the $12,500 level. As you know, harmonic trading requires an active trade management. One should look for confirmation patterns/candles following the pattern completion. One classic pattern formed following a BEARISH CYPHER pattern is the HEAD-AND-SHOULDERS pattern. Take a closer look at the BITCOIN Daily chart now. Look at the region following the pattern completion. What happened next was a breakout to the downside after the completion of a HEAD-and-SHOULDERS pattern.
So, first, we saw a very aggressive sell-off right after the pattern completion and, then, a breakout to the downside after the HEAD-and-SHOULDERS pattern completion. These are the signs telling us to take this BEARISH CYPHER pattern very VERY seriously.
So far, everything goes according to the plan. As long as we don't break above the downward trendline, the bearish play is ON. First level we should watch is the 0.382 retracement level at $9,150. Another factor that supports the importance of this level is the fact that 200-MA is right around the $9,150 level. I should also note that weekly 200-MA sits around the 0.618 retracement level which is around $7,100 (My chart doesn't show the 200-MA since I am price data from Binance. If you pull up a chart from another crypto exchange with price information going back further, you can view weekly 200-MA).
It is very hard to predict when things will happen in complex systems. But we can always analyze and make an educated guess, right? Considering how this pattern has behaved so far-- it sold off aggressively subsequent to the pattern completion and a breakout to the downside after a HEAD-and-SHOULDERS completion-- we can say that this pattern completion shows all the classic signs. Therefore, I predict that BTC will peck the $9,150 level this week or, probably, next week. I make this prediction by looking at Fibonacci time analysis. This pattern, if completed next week, would be perfectly symmetrical. It is totally okay for a pattern to be asymmetric around the B point. However, when things happen sooner, price action needs some time to rest and gather momentum to continue to its trend. It is common for patterns completed early to wait for the XB = BD moment to continue to its reversal move. Here is another classic SIGN.
Finally, considering the desire in DXY to move higher, more DOWNSIDE in BITCOIN is more likely than not. Therefore, traders chasing profit in altcoins should know that they have a very brief window and less room for profit than usual in the altcoin market. I believe that one with tight stop-losses and less greed can still make some profit in this market.
I always appreciate constructive feedback. Thank you!
Before sharing the harmonic patterns forming/formed in altcoins, I wanted to share with you my BITCOIN analysis. Because everything happening in cryptocurrencies tied to BTC.
A few weeks ago, I detected a Bearish CYPHER pattern in the weekly chart of BTC. The pattern completed on August 1st and BTC sold off very aggressively subsequent to the pattern completion. This means two things: 1) As a newbie, I am getting better at harmonic analysis. 2) This BEARISH CYPHER pattern should be taken seriously.
Right after the aggressive sell-off, bullish trend wanted to continue and tested the $12,500 level. As you know, harmonic trading requires an active trade management. One should look for confirmation patterns/candles following the pattern completion. One classic pattern formed following a BEARISH CYPHER pattern is the HEAD-AND-SHOULDERS pattern. Take a closer look at the BITCOIN Daily chart now. Look at the region following the pattern completion. What happened next was a breakout to the downside after the completion of a HEAD-and-SHOULDERS pattern.
So, first, we saw a very aggressive sell-off right after the pattern completion and, then, a breakout to the downside after the HEAD-and-SHOULDERS pattern completion. These are the signs telling us to take this BEARISH CYPHER pattern very VERY seriously.
So far, everything goes according to the plan. As long as we don't break above the downward trendline, the bearish play is ON. First level we should watch is the 0.382 retracement level at $9,150. Another factor that supports the importance of this level is the fact that 200-MA is right around the $9,150 level. I should also note that weekly 200-MA sits around the 0.618 retracement level which is around $7,100 (My chart doesn't show the 200-MA since I am price data from Binance. If you pull up a chart from another crypto exchange with price information going back further, you can view weekly 200-MA).
It is very hard to predict when things will happen in complex systems. But we can always analyze and make an educated guess, right? Considering how this pattern has behaved so far-- it sold off aggressively subsequent to the pattern completion and a breakout to the downside after a HEAD-and-SHOULDERS completion-- we can say that this pattern completion shows all the classic signs. Therefore, I predict that BTC will peck the $9,150 level this week or, probably, next week. I make this prediction by looking at Fibonacci time analysis. This pattern, if completed next week, would be perfectly symmetrical. It is totally okay for a pattern to be asymmetric around the B point. However, when things happen sooner, price action needs some time to rest and gather momentum to continue to its trend. It is common for patterns completed early to wait for the XB = BD moment to continue to its reversal move. Here is another classic SIGN.
Finally, considering the desire in DXY to move higher, more DOWNSIDE in BITCOIN is more likely than not. Therefore, traders chasing profit in altcoins should know that they have a very brief window and less room for profit than usual in the altcoin market. I believe that one with tight stop-losses and less greed can still make some profit in this market.
I always appreciate constructive feedback. Thank you!