It is worth pointing out that BTC has formed a rising wedge and is at the trend line resistance of a descending channel. As such, a correction to between 38k-44k (I prefer 41k at the 50% fib retracement) is rather likely. However I am sceptical of an ultra-bearish scenario, given the fundamentals and broader market sentiment (El Salvador trying to recognise BTC as...
An initial channel can be extrapolated from the initial sell-off in BTC to give an approximate time window in which I expect the rising wedge support to be challenged (7 Sept 22:00 - 8 Sept 18:30). As such, option traders who are short BTC call options to profit from time decay (theta) can use this as a initial guide to choose the appropriate option strike and expiry.
I remain flexible to changing technicals, but my initial trade setup favours the following path: - a break of ascending wedge support, - a bounce at 44k, which coincides with the 0.382 fib retracement from the July low to the Sept high - a retest of the rising support/resistance (white line) - a continuation down to 41.5k, which coincides with previous...
A break to the downside of the ascending wedge should target the 50% fib retracement, which coincides nicely with previous support/resistance at approximately 41k. If indeed this pattern holds, we should see a rally up to the 1.618 Fib extension during Q4 2021 at approximately 78.1k. A break of the 1.618 will lead to a rather sharp rally to the 2.618 at 100k....