BITCOIN H&S pattern + support levels. Bear trap or capitulation?
No time for "hellos," let's just get in to the analysis.
Firstly, if you look at the chart, a bearish H&S on the 4 hour chart, as well as the daily chart, has made itself quite apparent, with a nice straight neckline at the 7940 area. After the high of almost reaching 10k, we have unfortunately seen nothing but lower highs, as numerous traders on TV have pointed out.
On the 4 hour chart, we have already confirmed below the neckline, which would suggest we are heading for another reasonable drop in the short term. I have opened a short position, however I have only used 1/2 of my normal allocation. This is because of potential games being played by whales here, just to make it look like we are heading for another drop, same as how the acceleration towards 10k, and "hidden bullish divergence" was likely to be maniupation by whales in order to trap bulls. You should know by now that they just play the same game for bears every time! That's how this market has been lately.
Personally, I think this drop is very slow for bitcoin, and we are seeing some buying power towards the 7900 level, however bulls have not broken it yet.
If we can confirm below the neckline on the 1 day chart, it would be a much stronger sell signal.
Secondly, we have the moving averages. Look at the 120 EMA in yellow and the 300 EMA in blue, equal to the 20 and the 50 on the daily chart. The reason I use these is that they are the default levels for many traders, and it is what most people look at, so more people will use them. The 120 has gone below the 300, so we have a bearish crossover, and we are still trending below both.
I have also added the 54 EMA in purple. The reason for this is that, although 50 is a default level, and many do look at it on the 4 hour chart, 54/6= 9 day EMA on the daily chart, which is also a default level, and it is close to 50 anyway. We have been are trending below this since we broke the support level after the high of 9959 on Bitfinex, and worse, it has acted as resistance at several points, sending the price to a lower low each time. This time, BTC had a false breakout on 20/05, forming the tip of the right shoulder. This is again the whales with their tricks to trap bulls.
Finally, the low buying volume and high selling volume is a bearish sign and normal for a H&S pattern, so perhaps we will dump soon, or when the 1 day candle is confirmed below the neckline.
The H&S gives a target of 5928, however I strongly doubt we will reach that low, due to the very strong support level of 6900, and that this whole H&S might just be market manipulation after all, so keep a stop-loss above the right shoulder.
Trade safe!
Firstly, if you look at the chart, a bearish H&S on the 4 hour chart, as well as the daily chart, has made itself quite apparent, with a nice straight neckline at the 7940 area. After the high of almost reaching 10k, we have unfortunately seen nothing but lower highs, as numerous traders on TV have pointed out.
On the 4 hour chart, we have already confirmed below the neckline, which would suggest we are heading for another reasonable drop in the short term. I have opened a short position, however I have only used 1/2 of my normal allocation. This is because of potential games being played by whales here, just to make it look like we are heading for another drop, same as how the acceleration towards 10k, and "hidden bullish divergence" was likely to be maniupation by whales in order to trap bulls. You should know by now that they just play the same game for bears every time! That's how this market has been lately.
Personally, I think this drop is very slow for bitcoin, and we are seeing some buying power towards the 7900 level, however bulls have not broken it yet.
If we can confirm below the neckline on the 1 day chart, it would be a much stronger sell signal.
Secondly, we have the moving averages. Look at the 120 EMA in yellow and the 300 EMA in blue, equal to the 20 and the 50 on the daily chart. The reason I use these is that they are the default levels for many traders, and it is what most people look at, so more people will use them. The 120 has gone below the 300, so we have a bearish crossover, and we are still trending below both.
I have also added the 54 EMA in purple. The reason for this is that, although 50 is a default level, and many do look at it on the 4 hour chart, 54/6= 9 day EMA on the daily chart, which is also a default level, and it is close to 50 anyway. We have been are trending below this since we broke the support level after the high of 9959 on Bitfinex, and worse, it has acted as resistance at several points, sending the price to a lower low each time. This time, BTC had a false breakout on 20/05, forming the tip of the right shoulder. This is again the whales with their tricks to trap bulls.
Finally, the low buying volume and high selling volume is a bearish sign and normal for a H&S pattern, so perhaps we will dump soon, or when the 1 day candle is confirmed below the neckline.
The H&S gives a target of 5928, however I strongly doubt we will reach that low, due to the very strong support level of 6900, and that this whole H&S might just be market manipulation after all, so keep a stop-loss above the right shoulder.
Trade safe!
Trade closed: target reached:
It took a while to materialise, but we did indeed hit my target on the 23rd of June, one month after I posted this chart. Feedback is appreciated as I will start uploading charts frequently soon. I don't know if H&S targets stay valid after so much time, since normally they reach the target much faster than that.