As you can see, I've made a few adjustments to this chart. Let's begin with the original triangle that I had (in solid black.) We can see that it did break to the upside. It rallied up, met resistance, and turned lower, eventually breaking down from the extended lower level of the original triangle. Seeing this type of action has made me believe that we have just formed a larger triangle (black dashes.) Additionally, I believe that we could be forming a pattern, with a currently nonexistent right shoulder. I have drawn a hypothetical pattern on the chart, so that you can see the possible formation route. We have clear overhead resistance, which could send prices lower, to form the right shoulder, so I think it is a plausible scenario. Going back to the larger triangle formation, you can see that has been on a steady decline, during the entire formation. This shows that we are in a larger triangle, which has persisted beyond the original, because typically declines through the entire duration of all triangles. The breakout location is in line with a typical triangle breakout (usually around 75% of the duration of the triangle.) Also, we can see that price action is sort-of returning to the apex, which is also very typical of triangle breakouts, before the actual fall or rally occurs. I've pulled a quote to be more specific...
"Return to Apex: After the breakout (up or down), the apex can turn into future support or resistance. The price sometimes returns to the apex, or a level around the breakout, before resuming in the direction of the breakout."
So, therein lies the problem! Looking at the smaller triangle, did we just return to the apex support (in orange,) and we're now heading higher, in the direction of IT'S original breakout? Perhaps. Perhaps my larger triangle is BS. Let me tell you what we do, when we reach a crossroads in our analysis like this. We rely on conditions! We use X=A+B+C. For X (large triangle breakdown) to occur, we need A (the falling dashed ) to not be surpassed, we need B (the orange apex level) to be broken, and C (the low formed on the large triangle breakdown) to be surpassed. Those conditions, will solidify the large triangle breakdown theory, and that would put the downside price target around 500 bucks. Miraculously, that's insanely close to the 100% retracement, suggested in many of the other charts I've been reviewing.
A sustained breakout, above the apex of the large triangle, or the upper dashed , would probably invalidate this analysis.
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***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
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Following this pattern, when I draw the "mean" line under the "first sell off" stage in June last year, and above the "take off" stage in March, it lands us around $200.
To put this in the crypto frame, the "smart money" = the reddit HODL community. They are a strong-willed set, but everyone sees green, and when ETH hits 500 they will sell too.
Curious to hear what you think