FTM is holding steady in the bull channel going sideways at $0.38! This pattern indicates a continuation pattern to the upside for FTM, so why am I bearish?
How do we trade this? 🤔 FTM has had three pushes to the upside in this bull channel $0.24, $0.38, and $0.43, which is a typical leg count in a bull run before converting to a trading range or reversal. Bitcoin and the crypto market just had a monster sell-off at a key resistance level, and FTM's RSI is below the Moving Average at 59.00 which gives plenty of room to fall.
Do I think FTM is going back down to $0.20? We don't have evidence for that case yet. What we do have evidence for is a market-wide pullback from a burning hot bull run. I think it's reasonable to expect FTM to fall back to the previous support area of $0.28, an area we should look for a buy signal! Look for a strong bull signal and confirmation bar to enter the market for a 1:2 Risk/Reward Ratio. We have a ways to go before hitting this mark, we need to see the market status at the time to determine if 1:2 is a conservative ratio.
You could also short scalp this analysis, but I believe it's a bit too risky at the moment given FTM's bullish sentiment. Wait for more price action to determine if a short is reasonable. Until then, I would wait on the sidelines for the next moves!
💡 Trade Idea 💡
Long Entry: 0.295 🟥 Stop Loss: $0.260 ✅ Take Profit: $0.365 ⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Bull Channel, Bias to Long. 2. Currently in 5-Day Trading Range. 3. Watch for a Right Shoulder Rejection to Form Head and Shoulders. 4. RSI at 58.00 and below Moving Average, Bias to Short. 5. Short Scalp Opportunity, But Would Wait to Long at Support.
⚠️ Risk Warning! ⚠️ Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
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@behdark, Thank you! We didn't get the retest of the left shoulder level. It's very possible we have another leg up before any kind of reversal pattern has a chance to play out.