BTC HEADED BELOW 5K! ABANDON SHIP!!! (FOR NOW)
Below is a simple chart showing what I believe to be our course for the next few weeks. We are currently at a point that we will not come back to ($7325) without seeing sub 5K levels FIRST. Below is a simple 5 wave "ending diagonal" as it is referred to in EW terms. It is also known as a "falling wedge". The idea of this pattern is that as we near the apex, bullish pressure will cause a breakout. Each wave (A-E) should have 3 "subwaves" which you must zoom in to see. I will show some of these waves in the updates section for your reference. Here is what I am seeing now:
1. We have hit resistance on price at the upper border of the wedge.
2. Daily RSI has also hit resistance at the top of its wedge.
3. We have just got the fabled "death cross" which is a bearish crossing of the 50 and 200 EMA's.
The next logical step is rejection, followed by a dump that should take us back to the bottom of both wedges, giving us a completion of our C wave. We then should have one more push up (D) followed by a last dip (E) before we breakout.
Because both price and RSI are forming falling wedges, we can assume that we will EVENTUALLY get a nice breakout. Whether this will be the end of the correction or simply a bounce upwards before further downside is yet to be seen. The key takeaway here is that we are at what I believe to be a high point for the next few weeks. I have opened up massive short positions here and have sold all my alt holdings.
If you would like me to keep posting updates to this idea, please LIKE it, so that I know people are interested in following along. I will use wave counts to highlight targets as we near both edges of the wedge and as we come close to completing our C, D, and E waves.
As always, this is for educational purposes only and should not be taken as financial advice. Do your own research!
1. We have hit resistance on price at the upper border of the wedge.
2. Daily RSI has also hit resistance at the top of its wedge.
3. We have just got the fabled "death cross" which is a bearish crossing of the 50 and 200 EMA's.
The next logical step is rejection, followed by a dump that should take us back to the bottom of both wedges, giving us a completion of our C wave. We then should have one more push up (D) followed by a last dip (E) before we breakout.
Because both price and RSI are forming falling wedges, we can assume that we will EVENTUALLY get a nice breakout. Whether this will be the end of the correction or simply a bounce upwards before further downside is yet to be seen. The key takeaway here is that we are at what I believe to be a high point for the next few weeks. I have opened up massive short positions here and have sold all my alt holdings.
If you would like me to keep posting updates to this idea, please LIKE it, so that I know people are interested in following along. I will use wave counts to highlight targets as we near both edges of the wedge and as we come close to completing our C, D, and E waves.
As always, this is for educational purposes only and should not be taken as financial advice. Do your own research!
Comment:
Small update here:
As can be seen in the previous chart I posted above, this leg down we are seeing is the 3rd subwave of our wave 3 (or C wave as referred to in the original chart posted) and should take the form of a 5 wave impulse. What we are seeing now with this bounce is subwave 2 of 5 of this impulse. Using fib levels, we can estimate where this subwave 2 will end, and where the drop down will resume. In the chart below, I have marked the 38.2%, 50% and 61.8% retracement levels. It is useful to know that wave 2 corrections most commonly retrace 50-61.8% of Wave 1. Noting that we have already surpassed the 38.2% retracement, we can see that our most likely target will be somewhere in the 50-61.8% range, which is right about 7k.
Once we complete this wave 2, we begin wave 3 of the 5 wave impulse. Wave 3 is often the strongest of the impulse waves, so this next push down should be even stronger than the one we just experienced (from 7.5k-6.7k).
I am still holding all my short positions and am up about 10% at the moment. Will add more short positions at around 7k levels to catch the wave 3 down.
As can be seen in the previous chart I posted above, this leg down we are seeing is the 3rd subwave of our wave 3 (or C wave as referred to in the original chart posted) and should take the form of a 5 wave impulse. What we are seeing now with this bounce is subwave 2 of 5 of this impulse. Using fib levels, we can estimate where this subwave 2 will end, and where the drop down will resume. In the chart below, I have marked the 38.2%, 50% and 61.8% retracement levels. It is useful to know that wave 2 corrections most commonly retrace 50-61.8% of Wave 1. Noting that we have already surpassed the 38.2% retracement, we can see that our most likely target will be somewhere in the 50-61.8% range, which is right about 7k.
Once we complete this wave 2, we begin wave 3 of the 5 wave impulse. Wave 3 is often the strongest of the impulse waves, so this next push down should be even stronger than the one we just experienced (from 7.5k-6.7k).
I am still holding all my short positions and am up about 10% at the moment. Will add more short positions at around 7k levels to catch the wave 3 down.
Comment:
Correction to my last post! I stated the following: "Noting that we have already surpassed the 38.2% retracement, we can see that our most likely target will be somewhere in the 50-61.8% range, which is right about 7k."
At that time we had NOT surpassed the 38.2% retracement, we had surpassed the 23.6% retracement. My mistake!
At that time we had NOT surpassed the 38.2% retracement, we had surpassed the 23.6% retracement. My mistake!
Comment:
We can see in the chart below that we had a perfect touch off of and rejection of the 38.2% retracement level. This means that we likely saw the completion of our Wave 2 and we have just begun our Wave 3 down.
Comment:
Continued consolidation shows us we may just have a very complex Wave 2 going on. Wave 3 has yet to come it seems. Patience will pay off here, this consolidation we are getting is also giving us a nice bear flag. It's just a matter of time before we break down and wave 3 begins. Added to my short positions here.
Comment:
Rising wedge on hourly RSI, and the fact that we are nearing the apex of this pennant, makes it clear a breakdown (and Wave 3) should be happening shortly.
Rising wedge on hourly RSI, and the fact that we are nearing the apex of this pennant, makes it clear a breakdown (and Wave 3) should be happening shortly.
Comment:
The breakdown (and Wave 3) has begun. This is an hourly chart, and keep in mind we are only 10 minutes into this hour, so the volume we are seeing is 6x what we have seen over the last few hours. This confirm the breakdown and selling pressure is massive right now. Down we do. Time to make some more money on those shorts :)
Comment:
Well, that was unexpected to say the least lol. This push up does mean that my wave count on the short term was wrong, but it doesn't invalidate the fact that we are on a larger C wave of an ABCDE ending diagonal. I am still 100% bearish. What will make me bullish? Breaking through the blue downtrend line pictured below. Until then, this is a fakeout/bull trap imo.
Comment:
Hidden Bearish Divergence- indicates weakness of a rally. Commonly found during retracements of downtrends, and a sign to "dump the pumps". Currently on the 15 min timeframe, but I have a feeling we will see it on the hourly soon as well.
It is important to note that divergences don't necessary indicate that a reversal will happen immediately. Sometimes with bearish divergences prices can run higher for a bit before turning down, and sometimes with bullish divergences prices can go lower before turning up. I think we will test the blue downward sloping trendline above us, reject it, and then dump hard.
Hidden Bearish Divergence- indicates weakness of a rally. Commonly found during retracements of downtrends, and a sign to "dump the pumps". Currently on the 15 min timeframe, but I have a feeling we will see it on the hourly soon as well.
It is important to note that divergences don't necessary indicate that a reversal will happen immediately. Sometimes with bearish divergences prices can run higher for a bit before turning down, and sometimes with bullish divergences prices can go lower before turning up. I think we will test the blue downward sloping trendline above us, reject it, and then dump hard.
Comment:
We have broken through the blue resistance trend line but volume is still decreasing. We got no spike in volume whatsoever, and a legitimate breakout should see a big spike in volume for confirmation. Still bearish as long as we stay under $7500. Above that and I will be short term bullish, but until then i think this is just a bull trap.
Comment:
Bearish divergences everywhere! We have bearish divergences on the 15 min, 1 hour, and the 4 hour time frames. We do have a symmetrical triangle forming on the 5 min and the measured move takes us to $7200 levels, however, that is the only bullish sign left. Volume has failed to increase, momentum is fading, and bearish divs are appearing on all time frames. I think this push to 7200 levels will be our last push up before we start dumping again.
Bearish divergences everywhere! We have bearish divergences on the 15 min, 1 hour, and the 4 hour time frames. We do have a symmetrical triangle forming on the 5 min and the measured move takes us to $7200 levels, however, that is the only bullish sign left. Volume has failed to increase, momentum is fading, and bearish divs are appearing on all time frames. I think this push to 7200 levels will be our last push up before we start dumping again.
Comment:
Did I call it or what?
We didn't quite get to $7200 as bullish momentum from the triangle breakout was only strong enough to take us to $7170, but the dump that resulted has just begun.
We didn't quite get to $7200 as bullish momentum from the triangle breakout was only strong enough to take us to $7170, but the dump that resulted has just begun.
Comment:
Next leg down should start shortly. As can be seen in the chart below, volume on the pushes down is very strong while volume on the retracement up is ver weak. This indicates the bears are in control. We have a rising wedge that is also forming, and losing it will likely start the next wave down. Looking for 6k-6.3k for this next wave down. This will put us right back in the the large falling wedge and confirm a false breakout.
Comment:
BTC dodged a bullet there but has walked right into another one. We have formed a classic bear flag now and are expecting a breakdown. Losing the bottom of this channel here should begin the move down and the measured move of this bear flag takes us to just under 6.4k as it stands right now. Keep in mind measured moves are expected, but not guaranteed, and we still have to deal with that BLUE trendline below us that will now act as a support since we broke through it.
Order cancelled
Our C wave will likely end at sub 6k levels before we get a small bounce which will be our D wave.