MrJEB
Short

ETHUSD - An illegitimate case for the Bearish Butterfly

BITFINEX:ETHUSD   Ethereum / U.S. Dollar
We all know how well patterns play out in Crypto, but I digress, and we'll venture anyhow - there's just too much materializing with recent price action to not!

Recently, a Cup and Handle formation has captivated my limited attention on the daily, as well as a case for a Bullish and Bearish Butterfly.

With the Bullish Butterfly still in play (linked below, and still within the bounds of validation), I'd like to take a quick look at the Bearish Butterfly as well.

The recent 3 Drive Stair Case Uptrend came cascading down -20% from the $170 level or so, and with it, some nice Fibonacci retracement levels for traders to pivot and position with.

Price action is currently bound between 38.2% Resistance retracement, and the 50% Retracement Support. So far as my Cup and Handle Pattern interest goes, this range is keeping the Handle within validation (linked below should it interest you).

Ironically, the Bearish Pattern here has the 78.6% as a most notable point of contention, and as far as BTCUSD is comparatively concerned, has served as a pivotal point of price swings/drops coming out of upswing triangle consolidations.

Personally, I can see a stronger case for the Bullish Butterfly, but this Bearish Butterfly Pattern does line up nicely with the $83 to $103 uptrend line and the 78.6% Fib retracement (maybe a little too convenient). The top of the parallel uptrend channel here is relatively undefined since the stop at $170, and our previous touches are a modest 2, taking more of the shape of an ascending triangle pattern, and yet sitting in line with points C to D of the Bearish Butterfly, hinting at some upside breakout from the pattern.

Conversely, our less than developed by 83/103 trend-line too, only has 2 touches, and sits at a lengthy 45+/- days. Will Points C of the Bearish Butterfly become the third?

Bears first have to move past the 50% defense, past the 61.8% support where demand is standing by, and then on to an eager $116 range that could potentially set this rocket ablaze.

Your thoughts, comments, and likes are most appreciated.

Until then,
Good Luck, Traders. May you find yourself on the profitable side of it!
Comment: Thoughts on why the Bullish Butterfly and Bearish Butterfly, for that matter, are giving me pause. The retracement BC= minimum 38.2% and maximum 88.6% Fibonacci retracement of AB leg;

The BC is at 100% (over the max rule). Will that be an issue for the pattern, does it invalidate?

Comment: Another look at the Bearish Butterfly with the Minimum Requirements for the BC Wave.

BC= minimum 38.2% and maximum 88.6% Fibonacci retracement of AB leg;

Which puts present price action within the rules at this very moment for the above rule. The only thing that bothers me again, is the retracement AB. Its a little off.

Comment: Apologizes, I had my retracement upside down - so let's be accurate ;-)

Trade active: Another look with adjustments to the BC leg/wave. Should the uptrend continue, I have mapped a max CD Leg, which puts the Max in line with the upper parallel channel. See notes on the photo.

If the pattern validates somewhere on the upside, there are good gains to be had. I will also post a minimum requirements for the CD and AB Extension Leg.

Comment: Min Requirements for Bearish Butterfly of the CD Leg. See Notes

Comment: With the BC Leg stable, Bearish Bat in Play.
Comment:
Heavy left brained, like the rest of you.
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