DO you see this shit? I thought of it while I was about to update one of my ideas. This is a head and shoulder continuation pattern, a very possible one at least. And it is a part of that big inverse head and shoulder pattern, what the hell is this what am I looking at... Only in crypto for real, this is absurd.
Okay so outrage aside, this honestly looks like continuation pattern for a bear market and it is a head and shoulder continuation pattern on the macro scale and I am going to break this possible head and shoulder down into the major components of a head and shoulder pattern.
1.) Its huge and there is a divergence of volume on the 4 hour time frame, about 6100 to 6200 appears to be the neckline and the neckline appears to be strong (the bottom of the right and left shoulders of the inverse head and shoulder).
2.) The neckline which can be seen in light blue is horizontal which indicates a weaker uptrend prior or weaker bulls.
3.) Since the left shoulder of the head and shoulder top is the right shoulder of the inverse head and shoulder, I expect the top of the left shoulder (the yellow estimation line) to be close to symmetrical to the right shoulder of this pattern. the right shoulder would not be invalidated until it hits the same price or at least close to the same price as the head, which I doubt would be the case. The higher the right shoulder would indicate bearish weakness. However, if the price of the right shoulder cannot even reach the left shoulder then to me it would indicate a bearish strength. I expect the right shoulder to hit roughly 6850 to 7200.
4.) For this pattern to be complete there needs to be a break out of the neckline on high volume and given the strength of the bears right now I do expect that to occur.
5.) I expect a return move to occur, but it is possible that it does not occur.
Key Points:
1.) If this is the case we are fucked for now.
2.) The Price objective of this continuation pattern would be 3800.
3.) At this point there isn't much that can invalidate this pattern from occurring other than a rejection at the neckline and or a strong push beyond the head on the right shoulder.
4.) If a break at 5800 occurs then we are going to blow down to 4800 easily and I suspect there will be pauses between 4800 and 3800.
5.) There will be a major panic sell off.
Best of Luck: Trade smart, hedge risk and make some money.
Previous Analysis:
Okay so outrage aside, this honestly looks like continuation pattern for a bear market and it is a head and shoulder continuation pattern on the macro scale and I am going to break this possible head and shoulder down into the major components of a head and shoulder pattern.
1.) Its huge and there is a divergence of volume on the 4 hour time frame, about 6100 to 6200 appears to be the neckline and the neckline appears to be strong (the bottom of the right and left shoulders of the inverse head and shoulder).
2.) The neckline which can be seen in light blue is horizontal which indicates a weaker uptrend prior or weaker bulls.
3.) Since the left shoulder of the head and shoulder top is the right shoulder of the inverse head and shoulder, I expect the top of the left shoulder (the yellow estimation line) to be close to symmetrical to the right shoulder of this pattern. the right shoulder would not be invalidated until it hits the same price or at least close to the same price as the head, which I doubt would be the case. The higher the right shoulder would indicate bearish weakness. However, if the price of the right shoulder cannot even reach the left shoulder then to me it would indicate a bearish strength. I expect the right shoulder to hit roughly 6850 to 7200.
4.) For this pattern to be complete there needs to be a break out of the neckline on high volume and given the strength of the bears right now I do expect that to occur.
5.) I expect a return move to occur, but it is possible that it does not occur.
Key Points:
1.) If this is the case we are fucked for now.
2.) The Price objective of this continuation pattern would be 3800.
3.) At this point there isn't much that can invalidate this pattern from occurring other than a rejection at the neckline and or a strong push beyond the head on the right shoulder.
4.) If a break at 5800 occurs then we are going to blow down to 4800 easily and I suspect there will be pauses between 4800 and 3800.
5.) There will be a major panic sell off.
Best of Luck: Trade smart, hedge risk and make some money.
Previous Analysis:
Comment:
This post is late, I am sorry I have been really busy with external things right now, but here is a later update. By now you can see that there is a descending broadening wedge, and it just broke out to the upside, there will be more upside movement, right now the target of the pennant in the wedge is roughly 6900 and the broadening wedge is slightly above that, so I believe that there is a strong possibility that there will be a move towards 6900, currently there is nothing that has invalidated this inverse head and shoulder as of yet, but it is possible there is sideways movement and that 5800 is the absolute bottom.
Comment:
However, the neckline would no longer be horizontal, it would now be downward sloping which is an overwhelming indication that the bulls are weak.
Comment:
The bulls and the bears are fighting extremely aggressively, extremely aggressively, and there are moments where either the bulls or the bears slip up, but we are back in the broadening wedge, and we in a triangle in that wedge, is I am interested in seeing where this goes. Right now the bears have not really been able to consolidate for further moves to the downside, so they are weak, and the bulls are weak as well but they are strong enough to hold the support. I do not think that we are technically in a trend, and in trendless situations, TA becomes a weak tool to use.
Comment:
Bitcoin just slipped through the large trendline.
Comment:
It finally hit its price objective, after several failures. This is a tough market, as shorts were rising significantly, even as prices were rising, so I was suspecting a short squeeze and there was a short squeeze that happened for sure. But that was the price objective of the broadening wedge, currently there looks like a pennant, and on the lower time frames, it does not look like a strong pennant. I do suspect this to fail, and I do believe people are waiting to see the SEC's decision towards this coming ETF. It is most likely going to fail; however, and if it does succeed, it is not a physical ETF but I feel like if it does succeed, it will contribute to a positive market sentiment. The general truth you should know is that often times the masses are wrong and the few are correct, this uptick does not mean we are bullish and suddenly most news articles are bullish.
{Update to the Head and Shoulder Continuation] Now that this uptick has occured, this region now looks more like a bear flag on the daily, and I believe that this movement to the upside has completed this messed up right shoulder.
{Update to the Head and Shoulder Continuation] Now that this uptick has occured, this region now looks more like a bear flag on the daily, and I believe that this movement to the upside has completed this messed up right shoulder.
First Point, if this continuation pattern is complete meaning that it breaks through the neckline on high volume, then it has roughly an 85% chance of hitting its price objective.
Second Point, for those who don't know what a return move would be, it would be a breakout of the neckline and a retest of the neckline, and I think there might be a return move similar to this image in yellow.
Third Point, this pattern can be rejected if and only if it fails to break the neckline or fails to even return to it or if the right shoulder hits close to the price of the head or surpasses it.