Inverse Head & Shoulders on Bitcoin, Run to 5.4k Before New Lows
Hey everyone,
I have been watching this inverse head and shoulders pattern form on BTCUSD since the bounce from the 3.1k area and it looks like we may soon be breaking out allowing for a good trade opportunity. A few things that I am looking at:
1. We have a downward sloping neckline which is a bullish sign on an inverse H&S.
2. We are seeing bullish divergence via the Chaikin Oscillator and price.
3. We saw high vol. on L shoulder, lower vol. on the head, and increasing vol. on R shoulder (watching for increasing vol. leading to breakout).
The neckline could break sooner at a higher price or later at a lower price but I believe this to be a good relative area for a break. For a price target, I measured the distance from the low of the head vertically to the neckline and added that distance to the neckline where I believe a breakout will likely occur. This coincides with the 1.618 fib level (in yellow) which is a good confirmation on the target price. I will enter a trade when price breaks above the neckline with strong volume using a stop buy order. My stop will be set just below the bottom of the R shoulder. I do not think this is the end of this crash, I think we are seeing a leg up before we see the next leg down to lower lows so I am only looking to make a short-term trade here.
This should not be taken as financial advice, I am only showing what I am personally doing on this trade setup. Please leave a like below, I love to see that my hard work and time is appreciated by those viewing/reading.
Good luck all! :)
Entry: $4180
TP: $5410 (+29.4%)
SL: $3565 (-14.7%)
Risk/Reward Ratio: 2
I have been watching this inverse head and shoulders pattern form on BTCUSD since the bounce from the 3.1k area and it looks like we may soon be breaking out allowing for a good trade opportunity. A few things that I am looking at:
1. We have a downward sloping neckline which is a bullish sign on an inverse H&S.
2. We are seeing bullish divergence via the Chaikin Oscillator and price.
3. We saw high vol. on L shoulder, lower vol. on the head, and increasing vol. on R shoulder (watching for increasing vol. leading to breakout).
The neckline could break sooner at a higher price or later at a lower price but I believe this to be a good relative area for a break. For a price target, I measured the distance from the low of the head vertically to the neckline and added that distance to the neckline where I believe a breakout will likely occur. This coincides with the 1.618 fib level (in yellow) which is a good confirmation on the target price. I will enter a trade when price breaks above the neckline with strong volume using a stop buy order. My stop will be set just below the bottom of the R shoulder. I do not think this is the end of this crash, I think we are seeing a leg up before we see the next leg down to lower lows so I am only looking to make a short-term trade here.
This should not be taken as financial advice, I am only showing what I am personally doing on this trade setup. Please leave a like below, I love to see that my hard work and time is appreciated by those viewing/reading.
Good luck all! :)
Entry: $4180
TP: $5410 (+29.4%)
SL: $3565 (-14.7%)
Risk/Reward Ratio: 2