It took me a while to figure out what was going on in this case, as most patterns did not fit the volume identity to be confirmed as a pattern, even this one on the daily does not have strong confirmation from volume , and if we are looking for just patterns, I can find a multitude of patterns, within the same setting, and we are suppose to look at volume for confirmation, and after the last possible continuation pattern, which I stated was NOT confirmed by volume , ended up failing I decided to take a breather from posting, I pulled out of my trades, and took a second to take a look at what is happening, and as a trader, I always like to post ideas on the macro picture, so I understand my trades on the micro end. And I do like to come up with ideas for both the bullish and the bearish and sometimes sideways movement. Here are my ideas:
1.) The continuation inverse head and shoulder, failed which did not surprise me, however it was attempted and I was expecting a movement downwards, but not this strong.
2.) There are two patterns that I can strongly identify, a bullish symmetrical triangle, and another head and shoulder top.
The head and shoulder top(In purple, neckline and shoulders):
My case for it:
The volume on the 4 hour time frame does more to confirm it, and right now selling is strong, much stronger than the buying. Bitcoin -2.19%fell through the support of the large symmetrical triangle (orange line) that used to be its support for the second time. I doubt bitcoin -2.19%and the bulls have the strength to cross it once more, and for this reason, I do believe that an ascending triangle will be made it before another drop with the neckline as a support and the top of the ascending triangle as resistance. If the ascending triangle occurs, it will be enough to confirm the topping pattern. Currently, the resistance of the symmetrical triangle (yellow line) is providing strong support, However, I do believe that bitcoin -2.19%will re-enter this trendline and continue on the same downtrend as before. In addition, the market cap of crypto continues to trend downwards, which makes me believe that the down trend is not over.
My case against it:
The volume on the daily does not confirm it, and the uptrend would be short considering the inverse head and shoulder took nearly 2 months for it to complete, and considering that all things should be relative in respect to time and volatility, I feel like because of the duration and the volatility of that inverse head and shoulder warrants a more moves to the upside, however, there have been moments where something shows and inverse head and shoulder, hits its target and then continues its downtrend. It is possible that this is the case here. The slope of the neckline is really sloped upwards roughly 45 degrees and there is still a good amount of buy pressure.
Head and shoulder itself:
The neckline has an upward sloping angle which just means that it is a normal topping head and shoulder pattern and it does not exactly read into whether the next trend will be bullish, the two other shoulders are much smaller and they are complex shoulders, meaning that they have multiple dips or double shoulders. As for the left shoulder, it should exhibit the same properties as the right shoulder. Its price objective, is roughly 6500 if it can break through the neckline.
The Symmetrical triangle(It is composed of the light blue and the purple neckline):
My case for it:
Right now, on the daily, the volume matches the symmetrical triangle better than the inverse head and shoulder, where the left side has the most volume and then volume is slowly diminishing as the support and resistance lines approaches the apex. The buy volume is still strong especially as the price moves downwards, the bulls and the bears and definitely fighting it out and they have been for a while now. The bulls are not giving this success up without a fight.
My Case against it:
If its valid, it can break both directions.
1.) The continuation inverse head and shoulder, failed which did not surprise me, however it was attempted and I was expecting a movement downwards, but not this strong.
2.) There are two patterns that I can strongly identify, a bullish symmetrical triangle, and another head and shoulder top.
The head and shoulder top(In purple, neckline and shoulders):
My case for it:
The volume on the 4 hour time frame does more to confirm it, and right now selling is strong, much stronger than the buying. Bitcoin -2.19%fell through the support of the large symmetrical triangle (orange line) that used to be its support for the second time. I doubt bitcoin -2.19%and the bulls have the strength to cross it once more, and for this reason, I do believe that an ascending triangle will be made it before another drop with the neckline as a support and the top of the ascending triangle as resistance. If the ascending triangle occurs, it will be enough to confirm the topping pattern. Currently, the resistance of the symmetrical triangle (yellow line) is providing strong support, However, I do believe that bitcoin -2.19%will re-enter this trendline and continue on the same downtrend as before. In addition, the market cap of crypto continues to trend downwards, which makes me believe that the down trend is not over.
My case against it:
The volume on the daily does not confirm it, and the uptrend would be short considering the inverse head and shoulder took nearly 2 months for it to complete, and considering that all things should be relative in respect to time and volatility, I feel like because of the duration and the volatility of that inverse head and shoulder warrants a more moves to the upside, however, there have been moments where something shows and inverse head and shoulder, hits its target and then continues its downtrend. It is possible that this is the case here. The slope of the neckline is really sloped upwards roughly 45 degrees and there is still a good amount of buy pressure.
Head and shoulder itself:
The neckline has an upward sloping angle which just means that it is a normal topping head and shoulder pattern and it does not exactly read into whether the next trend will be bullish, the two other shoulders are much smaller and they are complex shoulders, meaning that they have multiple dips or double shoulders. As for the left shoulder, it should exhibit the same properties as the right shoulder. Its price objective, is roughly 6500 if it can break through the neckline.
The Symmetrical triangle(It is composed of the light blue and the purple neckline):
My case for it:
Right now, on the daily, the volume matches the symmetrical triangle better than the inverse head and shoulder, where the left side has the most volume and then volume is slowly diminishing as the support and resistance lines approaches the apex. The buy volume is still strong especially as the price moves downwards, the bulls and the bears and definitely fighting it out and they have been for a while now. The bulls are not giving this success up without a fight.
My Case against it:
If its valid, it can break both directions.
Previous analysis: