If there is anything I'd like to get across from this chart, it's that using inverted charts in bear markets can be extremely helpful when it comes to analyzing wave patterns.
If you go to my recent ETP long idea, (although I didn't show my wave count on my inverted chart), but I was confident of the idea simply because there is a clear-as-day 5 wave structure to the upside (downside in regular chart), and that a retracement is inevitable (go for long in regular chart).
This chart is an IOTUSD H12 chart; it is rather self-explanatory.
On the left, there is a clear 5 wave pattern that makes wave A, labelled in blue: (i) - (ii) - ( iii ) - (iv) - (v)
In the middle there is wave B that terminates at .786 ret of wave A.
I would like to draw your attention to the black and red wave counts on the right, these are the two possible paths at the moment (according to wave analysis):
Before going into it, please focus on the extended fibonacci lines on the far right. Especially the black '1' and '1.618' levels. These levels are wave (i)-(ii) fib extension of wave C. The blue fib extensions are that of wave A-B.
- Black count: we are still in wave 5 of C, and a reasonable fibonacci target will be around $0.77 (1:1 A-B ext; in blue).
- Red count: we have completed wave C, which terminated at the of wave (i)-(ii) of C (shown by box with '**'). In this case, wave ( iii ) would terminate at the 1:1 extension of wave (i) - (ii).
If black count is correct, we should see the price go up to ~$1.00 and reverse back down to the target box.
If red count is correct, we have not only completed our pattern, but also wave 1-2 of two lower degrees. In this case we will be testing ATHs rather soon.
*Note that tradingview's play button does not work for indicators such as this inverted candle chart, you can follow my labels and draw it and follow it on your own. I'd be more than happy to answer your questions if you have any.
This is an educational post so I'd appreciate if you share it should the information be beneficial to you. Much love.
Extreme low at $0.7735
What you saw was most likely an impulse instead of a correction to the upside.
We will see new ATH by the end of the year.