Weak breakout of 4200 indicates ascending wedge reversal pattern
Strong news has pushed crypto to test resistance at 4200 for the third time, and is likely to break out in the next 10 days.
However a weak breakout could be the start of an ascending wedge formation, if the second impulse fails to clear 4300.
If it breaks strong with volume to 4500+, then the pennant breakdown theory is invalidated.
However if it breaks out weakly, hitting 4250-4350, and then draws back with only slightly higher highs on the next impulses, it will be forming an ascending wedge, which is a breakdown pattern with a target around 4500. That would finish the long term pennant, and the breakdown should be hard.
If the first leg of the big breakdown fails to crash into mid low 3000, then we can consider that the second leg will be weaker and start to form a horizontal price channel, which actually is a good sign of accumulation before a significant bull run. (see August 2015).
However a weak breakout could be the start of an ascending wedge formation, if the second impulse fails to clear 4300.
If it breaks strong with volume to 4500+, then the pennant breakdown theory is invalidated.
However if it breaks out weakly, hitting 4250-4350, and then draws back with only slightly higher highs on the next impulses, it will be forming an ascending wedge, which is a breakdown pattern with a target around 4500. That would finish the long term pennant, and the breakdown should be hard.
If the first leg of the big breakdown fails to crash into mid low 3000, then we can consider that the second leg will be weaker and start to form a horizontal price channel, which actually is a good sign of accumulation before a significant bull run. (see August 2015).
