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As we can see bitcoin has recently broke out from the downward slopping upper trend-line of symmetrical consolidation triangle. But is the coast really clear for longs just yet? The chart depicts a critical supply zone up-ahead at the 40-42k region. We have tested this zone multiple times through this consolidation period and it has always resulted in rejection.
From a bullish perspective, there is evidence to suggest that the bears are potentially losing momentum. Each rejection from this region has ensued in corrections that have maintained consecutive higher lows. This is exact reason why the bottom trend line of the symmetrical triangle has sustained an ascending structure. However, it is also important to note that regardless of the fact that we have broken out from the symmetrical triangle, there is not necessarily confirmation of a broader market reversal as we are still within the greater consolidation zone illustrated by the upper purple rectangle and lower blue rectangle. We can attain evidence of a possible change in trend once we break the previous structural lower high represented as the rose line on the chart. This will exhibit the presence of increasing bullish sentiment in the market which will provide an additional factor as confluence to support a long position. However this is a more aggressive entry as it is technically still within both the consolidation region and the critical supply zone. Thus, it is safer to take a more conservative approach and simply wait for the market to breakout from these zones by creating a strong 4 hourly close above the dashed purple line. This will provide us with a more secure entry that is based on sufficient confirmation.
Disclaimer: This post is not intended to provide financial advice.
Please make sure to follow me and like this idea if you enjoy!
As we can see bitcoin has recently broke out from the downward slopping upper trend-line of symmetrical consolidation triangle. But is the coast really clear for longs just yet? The chart depicts a critical supply zone up-ahead at the 40-42k region. We have tested this zone multiple times through this consolidation period and it has always resulted in rejection.
From a bullish perspective, there is evidence to suggest that the bears are potentially losing momentum. Each rejection from this region has ensued in corrections that have maintained consecutive higher lows. This is exact reason why the bottom trend line of the symmetrical triangle has sustained an ascending structure. However, it is also important to note that regardless of the fact that we have broken out from the symmetrical triangle, there is not necessarily confirmation of a broader market reversal as we are still within the greater consolidation zone illustrated by the upper purple rectangle and lower blue rectangle. We can attain evidence of a possible change in trend once we break the previous structural lower high represented as the rose line on the chart. This will exhibit the presence of increasing bullish sentiment in the market which will provide an additional factor as confluence to support a long position. However this is a more aggressive entry as it is technically still within both the consolidation region and the critical supply zone. Thus, it is safer to take a more conservative approach and simply wait for the market to breakout from these zones by creating a strong 4 hourly close above the dashed purple line. This will provide us with a more secure entry that is based on sufficient confirmation.
Disclaimer: This post is not intended to provide financial advice.
As you can see we accurately depicted that the break of the symmetrical triangle did not necessarily mean a broader market reversal. Upon the breakout we perfectly touched the R2 level before rejecting back into the triangle to find support at a the weekly pivot. Price briefly wicked below the pivot to touch the ascending lower trend-line of the symmetrical triangle before continuing to consolidate at the pivot. The area at the pivot was a highly confluence support zone as it was level of the local VPFR, a prior resistance zone which now flipped as support exhibited by the light red box on the chart, and the 0.5 fib. With the new data points market structure has established we are able to redraw the upper-trend-line of the symmetrical triangle with the new descending black trendline, the prior one is now a dashed blue trend-line on the chart.