STORM has created a nice rounded bottom on the 4h chart, also known as saucer or bowl. Maybe you could see this pattern also as a cup and handle.
A confirmed breakout above 750 satoshis would bring the pattern into play. The target for this pattern is around 1,100 satoshis (red horizontal line), meaning a nice 45% profit.
If you enter after the breakout, you could set a relatively tight stop loss just below the neckline, and you get a very nice 1:6 risk to reward ratio (see chart).
Having said that, it looks like BTC might retrace in the next days. That could delay or hinder this trade, and we could get rejected at the neckline. Therefore, I would advise to only enter after a confirmed breakout with high volume, if you're not in a position already.
Good luck trading!
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We are knocking and knocking on the neckline, creating an ascending triangle in the process:
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A possible Elliott-wave count:
I see us being now in the B corrective wave. The C wave would bring us down to the bottom of the triangle again, and then hopefully the next wave up will lift us over the neckline.
Let's if this plays out - and if BTC doesn't spoil the party in the meantime.
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We have a breakout, but there is not enough volume supporting it atm - I think we will fall back, so be careful.
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I updated my chart, I think it is much more accurate now:
- updated Elliott wave count, makes more sense now: ABC correction still has to be done - I moved the neckline up a bit to 770 satoshis - adjusted the triangle a little bit
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ABC correction is finished, imo.
And now let's get the hell outta here... :)
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So it appears that the correction was still not finished.
We got an impulse wave failure up, therefore making another ABC correction, which in total gave us the W - X - Y structure. At least that is how I interpret it for now.
We bounced off perfectly of the 61.8% Fibonacci level - isn't that beautiful?
Now we need to get back over the uptrend line asap, otherwise more downwards movement could occur.
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Hm, looking at the bigger picture, I think there might be a bit more movement to the downside ahead of us.
I zoomed out and made an Elliott wave count of one wave level higher. It is very possible that the complete wave cycle I analysed before was actually the wave 5 of a bigger wave cycle. If that's the case, we could be now in the ABC correction of that bigger cycle.
Have a look at it:
I think the whole correction so far might have been just the wave A, so up next should be an upmove to B, and then down again to form wave C. We have retraced so far only to the 23.6% Fib-level. It would be extremely bullish, if we would bounce right back from here, so I think that a further retracement to at least the 38.2% level is more likely.
So this whole trade could take longer than expected.
On a positive note, this correction could actually form a handle to complete a cup & handle pattern.
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STORM is forcing us to be patient.
As already mentioned abobe, it looks like we could be forming the handle to a large cup (which was our bowl) right now:
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*mentioned above (we need an edit button for the comments)
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A resistance between 720 - 730 sats is giving us a really hard time atm. Once we break that, I think we'll shoot up to the neckline.
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Nothing new to report, we just can't get above the 720 sats resistance. I will update this trade once we have real action again.
@Dolladollaiv, thanks! Check out the latest update :)
tongercore
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Nice solid advice. Thank You!
CryptoCow
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@tongercore, You're welcome, thanks for commenting!
Peter_O
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@CryptoCow why isn't the neckline higher? It could be anywhere from 757 to 980. Do you know of any confirmation signs saying where neckline should form?
CryptoCow
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@kryptos76, I would consider the neckline more of an area than an exact level, just as supports and resistances.
You can clearly see on the chart that the area which I defined as the neckline has been very reactive in the past and in the present (we poked through it already twice, but could not break it yet).
Where would you put the neckline, and why?
Peter_O
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@CryptoCow, why not the top of the wick on the left side? It would be 930 in your chart, but I swear I saw it at 980.
Peter_O
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@CryptoCow, if aiming for the wick is not a good idea, could you quote/link some textbook rule, for my learning?
CryptoCow
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@kryptos76, Actually I just moved it a little bit higher to 770 satoshis.
To be honest, I'm ignoring those long wicks. Those were created by a "mania phase", were the buyers were going nuts.
I view them as some kind of overshoots over the real structure level - which you can see at the open/close of the candles.
There are several 4 h candles there with their bodies opened/closed at that level, that's why I consider it the neckline. The wicks have all different highs, as you can see. So the 930 (or 980, whatever) level was only reached one single time, whereas the level I identified as neckline played a much more significant role in the past. Does that make sense?
Mind you, this is just my interpretation - I don't claim to be the master of the charts, unlike some others on this platform ;)
Maybe STORM will tank all the way to 200 satoshis, and this whole trading idea will become a joke... who knows. The future is unknown... :)
My issue with not including wicks is that it is very subjective. They look one way on 4h but completely different on 1d or 1h. Whereas including them in the analysis is kinda correct, because it is undeniable that the price was there.
Still, I don't know what is the by-the-book approach. Time will tell.