Good morning traders. As mentioned yesterday, price did bounce off the drop through the bottom of the diamond. Will it continue higher? Short TF looks like price may have printed a double bottom which would provide a short term target of around $7980 if we can get a close above $7830/40. This would take price to the top of the local TR once more after printing, what appears to be, a spring (with the second bottom shortly after being a test). Supply on the orderbook remains heavy through $8400 at this time. How much of that supply is just there to convince retail traders to sell into the professional hands, though, before price takes off to finish the parabola?
When looking at the various exchanges, we see that price hasn't broken that parabola on the daily chart yet. For exchanges like Bitstamp, we may have to ignore that sharp drop down to $6000 recently as it is an outlier and the rest of the exchanges hit a low of around $6600-$7000 or so. I know everyone has these low targets of $10,000 or less, but if we are about to hit the final leg up of a parabola then it makes more sense that we hit $14,000-$15,000 at least. The last thrust of a parabola usually produces multiple large candles in succession as continually, quickly rising price leads to strong retail FOMO thereby printing an overextended 5th wave (the longest of the series). If that's the case, and our 3rd wave was from ~$3300-$8300, then we see that this final wave is likely to target $15,000 or higher. Of course this is all highly speculative, but such is the nature of parabolas making them extremely difficult to trade effectively. Everyone will be tempted to try to ride it up as far as it goes, and even when it gets to that point, most traders will continue to hold while hoping that it heads up higher. Is it possible that we could see price top out near the ATH? Believe it or not, that is a possibility, especially since we understand that the 2018 correction was a corrective wave and the first subwave of the next wave set usually tops out around the previous wave's top. I'm certainly not trying to cause any FOMO, but laying out the case for extreme moves possibly coming so that traders aren't caught unaware.
For now, I have the Bitmex and Binance charts to give traders an idea of the differences across the exchanges. As I have been mentioning, the May 16th-18th low is too varied across the exchanges to have price drop from here, I believe. So my expectation continues to be up further and I remain long. We can see price possibly printing a pennant or flag at this time with the 4H pivot continuing to provide support. RSI remains bullishly above 50 and Stoch RSI just bounced in oversold and is currently printing a bullish cross. If price breaks the descending resistance, then traders can likely look for price to at least target the daily R5 pivot around $9300-$9400, depending on which exchange you are looking at, with $10,000 normally being a strong psychological level, and the weekly R1 pivot printing around $12,850-$13,050. Additionally, we have the large descending wedge target around $14,600. Those would be the big levels that I would watch. Daily RSI is below overbought at 66-67 and Stoch RSI is in oversold. So there is room on these larger TFs for a final large push up. As I have mentioned all along, I'm looking for clear bearish divergence on the daily TF to indicate that this wave set has completed.
All this bullish talk being what it is, there is the possibility that we are printing a large double top. If that's the case, and we close below that May 16ht-18th swing low, then I would be looking for price to find support around $5000-$5300. I'm not sure how the 4H Stoch RSI could sustain such a drop at this point but I am watching just in case.
My final thought to share with y'all is that Memorial Day weekend is coming up in a couple of days in the U.S. It is likely that most traders in the U.S. will be taking trips and spending time with family for the extended weekend. Memorial Day weekend is usually Saturday-Monday, however many people take Friday off as well. As such, there's a case to be made for a strong move up between today and Friday, or during the weekend when significant volume is often absent from the market. Traders should remain especially vigilant.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
When looking at the various exchanges, we see that price hasn't broken that parabola on the daily chart yet. For exchanges like Bitstamp, we may have to ignore that sharp drop down to $6000 recently as it is an outlier and the rest of the exchanges hit a low of around $6600-$7000 or so. I know everyone has these low targets of $10,000 or less, but if we are about to hit the final leg up of a parabola then it makes more sense that we hit $14,000-$15,000 at least. The last thrust of a parabola usually produces multiple large candles in succession as continually, quickly rising price leads to strong retail FOMO thereby printing an overextended 5th wave (the longest of the series). If that's the case, and our 3rd wave was from ~$3300-$8300, then we see that this final wave is likely to target $15,000 or higher. Of course this is all highly speculative, but such is the nature of parabolas making them extremely difficult to trade effectively. Everyone will be tempted to try to ride it up as far as it goes, and even when it gets to that point, most traders will continue to hold while hoping that it heads up higher. Is it possible that we could see price top out near the ATH? Believe it or not, that is a possibility, especially since we understand that the 2018 correction was a corrective wave and the first subwave of the next wave set usually tops out around the previous wave's top. I'm certainly not trying to cause any FOMO, but laying out the case for extreme moves possibly coming so that traders aren't caught unaware.
For now, I have the Bitmex and Binance charts to give traders an idea of the differences across the exchanges. As I have been mentioning, the May 16th-18th low is too varied across the exchanges to have price drop from here, I believe. So my expectation continues to be up further and I remain long. We can see price possibly printing a pennant or flag at this time with the 4H pivot continuing to provide support. RSI remains bullishly above 50 and Stoch RSI just bounced in oversold and is currently printing a bullish cross. If price breaks the descending resistance, then traders can likely look for price to at least target the daily R5 pivot around $9300-$9400, depending on which exchange you are looking at, with $10,000 normally being a strong psychological level, and the weekly R1 pivot printing around $12,850-$13,050. Additionally, we have the large descending wedge target around $14,600. Those would be the big levels that I would watch. Daily RSI is below overbought at 66-67 and Stoch RSI is in oversold. So there is room on these larger TFs for a final large push up. As I have mentioned all along, I'm looking for clear bearish divergence on the daily TF to indicate that this wave set has completed.
All this bullish talk being what it is, there is the possibility that we are printing a large double top. If that's the case, and we close below that May 16ht-18th swing low, then I would be looking for price to find support around $5000-$5300. I'm not sure how the 4H Stoch RSI could sustain such a drop at this point but I am watching just in case.
My final thought to share with y'all is that Memorial Day weekend is coming up in a couple of days in the U.S. It is likely that most traders in the U.S. will be taking trips and spending time with family for the extended weekend. Memorial Day weekend is usually Saturday-Monday, however many people take Friday off as well. As such, there's a case to be made for a strong move up between today and Friday, or during the weekend when significant volume is often absent from the market. Traders should remain especially vigilant.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.