Fibs, Elliotts, and Flags | Dip to ~$430 before $500 target
For those of you who missed out on the big spike or are just looking for the optimal time to take profits hopefully this analysis can help.
When I trade, I like to look for many patterns overlapping telling me the same thing. After all, it only makes sense that an analysis with 100 different patterns suggesting an upward movement will likely be more reliable than one with only 1 pattern suggesting growth. I will break down the three patterns -fib lines, an elliot wave, and a flag pattern -that imply we have a little more room to grow.
Fibonacci Lines:
Plotting fib retracement from the local lows of ~345, ~375, ~395 we can see that there is confluence at ~$430. Confluence is where we see fib lines start to match up to add strength to certain supports and resistances. All three of these plots line up their .382, .5, .618 lines respectively at ~$430 so I believe we will head upwards after touching that area. We can actually see a small amount of confluence at ~$442 that provided the support for the short dip. My fib analysis is what leads me to believe a strong ~$430 turn around point.
Elliot Waves - Blue Solid Lines
Since the start of the rapid growth on the 22nd we've started to see an elliott wave form. Rather nicely we've seen waves 1-3 follow the rules and 4 as of now is following suit. If what I assume to be wave 4 stops at ~$430 as I mentioned, then I'll have even more confidence in my wave 5 prediction.
Flag Patterns - Blue Dashed Lines
Since the 25th we've started to see a flag pattern form. We've tested the upper and lower boundaries about 2 times each so far, and the more we test it the more confident I'll feel in the pattern. If we stay in the channel all the way to ~$430 I believe we'll start to see the growth to the final ~$500 target.
~$500 Target explanation
I came to the $500 target based on a few different ideas. For one, wave 5 has to end somewhere. For a highly psychological and emotional market, $500 seems like a reasonable place where many people will look to pull out. Since we have continually broke through the ATH over the last week it's harder to know where the resistance lie above where we have traversed. Additionally, flag patterns tend to exhibit a similar growth pattern after completion of the flag, so taking the left hand side of the flag and placing it on the right side of the channel we end up around $505
** It's been a while since I've posted because I got out of the habit. I've realized that writing out my thoughts helps me understand the market better, so I hope I can continue to provide my insight to the community. Remember, this is the thought process that governs my actions, I do not want to tell anyone to buy or sell here/there. I only wish to share what I believe will happen and how I will approach the market. Happy belated thanksgiving to those who celebrate as well!
** Comments and critiques always welcome - especially contrasting ideas.
** @CAG_CryptoTA
When I trade, I like to look for many patterns overlapping telling me the same thing. After all, it only makes sense that an analysis with 100 different patterns suggesting an upward movement will likely be more reliable than one with only 1 pattern suggesting growth. I will break down the three patterns -fib lines, an elliot wave, and a flag pattern -that imply we have a little more room to grow.
Fibonacci Lines:
Plotting fib retracement from the local lows of ~345, ~375, ~395 we can see that there is confluence at ~$430. Confluence is where we see fib lines start to match up to add strength to certain supports and resistances. All three of these plots line up their .382, .5, .618 lines respectively at ~$430 so I believe we will head upwards after touching that area. We can actually see a small amount of confluence at ~$442 that provided the support for the short dip. My fib analysis is what leads me to believe a strong ~$430 turn around point.
Elliot Waves - Blue Solid Lines
Since the start of the rapid growth on the 22nd we've started to see an elliott wave form. Rather nicely we've seen waves 1-3 follow the rules and 4 as of now is following suit. If what I assume to be wave 4 stops at ~$430 as I mentioned, then I'll have even more confidence in my wave 5 prediction.
Flag Patterns - Blue Dashed Lines
Since the 25th we've started to see a flag pattern form. We've tested the upper and lower boundaries about 2 times each so far, and the more we test it the more confident I'll feel in the pattern. If we stay in the channel all the way to ~$430 I believe we'll start to see the growth to the final ~$500 target.
~$500 Target explanation
I came to the $500 target based on a few different ideas. For one, wave 5 has to end somewhere. For a highly psychological and emotional market, $500 seems like a reasonable place where many people will look to pull out. Since we have continually broke through the ATH over the last week it's harder to know where the resistance lie above where we have traversed. Additionally, flag patterns tend to exhibit a similar growth pattern after completion of the flag, so taking the left hand side of the flag and placing it on the right side of the channel we end up around $505
** It's been a while since I've posted because I got out of the habit. I've realized that writing out my thoughts helps me understand the market better, so I hope I can continue to provide my insight to the community. Remember, this is the thought process that governs my actions, I do not want to tell anyone to buy or sell here/there. I only wish to share what I believe will happen and how I will approach the market. Happy belated thanksgiving to those who celebrate as well!
** Comments and critiques always welcome - especially contrasting ideas.
** @CAG_CryptoTA
Comment:
The support at $445-$450 was stronger than I expected so it looked like we bounced up from there. So far 2 of the 3 patterns I wrote about are still holding up, but we were unable to reach $500 in one go. The potential is still there considering Wave 5 takes us a little higher than the peak of wave 3; however the risk-reward just isn't there for me to reenter - especially at this point ($470 at the moment). Maybe if I had re-entered at the low of the dip. Nonetheless, I'm always reluctant to enter at highs because markets consolidate. There will be other risk averse opportunities.