OK, I know that my previous chart idea has been invalidated by Bitcoin's rally, but part of me is still suspicious that an almighty bull trap may be ahead of us. Why do I think this?
Whilst I don't want this scenario to play out, I have to admit that it has an irresistible symmetry to it and in my mind, would draw a compelling close on the bear market of 2018.
One thing is for sure, I will be keeping a very close eye on this on Wednesday and Thursday.
Take care and may your trades be profitable.
- Wave 3 on my chart seems to fit in with EW theory insofar as volume is high and it is the longest of the waves.
- My target for Wave 4 is a 61.8% retrace of Wave 3 on a projected fib timescale that has fairly accurately traced the key peaks and troughs of this downtrend.
- We are overbought on the 4 hour chart - although as with previous monster rallies, BTC can stay like this for days.
- Projecting a trend line from the lows of summer 2017 (before we entered the parabolic phase) we meet the end of wave 5 at $6,251 which is practically the low of wave 3 and which again, would fit neatly with EW theory (wave 5 doesn't have to exceed wave 3, and is expected to reach it's zenith/nadir on less volume than wave 3).
Whilst I don't want this scenario to play out, I have to admit that it has an irresistible symmetry to it and in my mind, would draw a compelling close on the bear market of 2018.
One thing is for sure, I will be keeping a very close eye on this on Wednesday and Thursday.
Take care and may your trades be profitable.
Trade active:
Quite impressed with how accurate my forecast appears to have been although I'm now half-expecting a waterfall sell off taking us below the target.