That the price bounced off the H+S neckline (thick white line) does not surprise me, in fact I expected it (see:
)
However, the way it bounced off surprised me. Previously, when the price met the line it would meander about the line, and cross it in both directions testing it before eventually plunging. This time however, it has just bounced off and dropped very aggressively. If this was the start of a Wave 5 up, I would expect the price to touch the line, wait maybe an hour or 2 near the line then quickly shoot past the line, then go back and meet the line before finally launching upward. This did not happen, instead it just touched the line and immediately got rejected: not a good "Wave 5" sign.
Therefore the possibility exists that the ABC correction wave is over and that we are heading down, this time to the $20k region. Don't be shocked, I was in denial back in 2018 when I felt that surely the price just can't keep going up and down suddenly like a yo-yo. It can.
The key to whether we're going down are decided by the candles in this bounce up from $33700 (blue circle). If we are definitely heading down, I expect that this wave going up will be a confusing mix of red and green hourly candles, which is characteristic of a corrective wave. Furthermore, I expect there to be lower highs and lower lows, or a rising wedge type pattern (with decreasing volume).
If we are heading back to the H+S neckline, then the candles will be more obvious: I expect strong impulsive green hourly candles back toward the H+S neckline, with the downward waves being a mix of red and green hourly candles. We are currently too far away from the H+S neckline to be bullish UNLESS we see strong impulsive hourly candles going up.
The longer this blue circled area goes sideways, the more I am inclined to believe the ABC is over, and we are going back down.
However, the way it bounced off surprised me. Previously, when the price met the line it would meander about the line, and cross it in both directions testing it before eventually plunging. This time however, it has just bounced off and dropped very aggressively. If this was the start of a Wave 5 up, I would expect the price to touch the line, wait maybe an hour or 2 near the line then quickly shoot past the line, then go back and meet the line before finally launching upward. This did not happen, instead it just touched the line and immediately got rejected: not a good "Wave 5" sign.
Therefore the possibility exists that the ABC correction wave is over and that we are heading down, this time to the $20k region. Don't be shocked, I was in denial back in 2018 when I felt that surely the price just can't keep going up and down suddenly like a yo-yo. It can.
The key to whether we're going down are decided by the candles in this bounce up from $33700 (blue circle). If we are definitely heading down, I expect that this wave going up will be a confusing mix of red and green hourly candles, which is characteristic of a corrective wave. Furthermore, I expect there to be lower highs and lower lows, or a rising wedge type pattern (with decreasing volume).
If we are heading back to the H+S neckline, then the candles will be more obvious: I expect strong impulsive green hourly candles back toward the H+S neckline, with the downward waves being a mix of red and green hourly candles. We are currently too far away from the H+S neckline to be bullish UNLESS we see strong impulsive hourly candles going up.
The longer this blue circled area goes sideways, the more I am inclined to believe the ABC is over, and we are going back down.