Bitcoin setting up for reversal but has room to fall yet
Bitcoin
BTCUSD
seems to be nearing the end of its correction its been undertaking since the peak on 2/20. It has made an expanded flat correction with a deep third wave C that did in fact already meet its target of 161.8% of wave B and hit the 61.8% fib retracement level of the previous 5 wave cycle leading to the December peak, but nevertheless
BTCUSD
still appears to have tiny space to fall further, especially with the lack of bullish volume in the current 36 hour correction. Some people have clearly jumped on the wagon already, I know I did before I saw this current correction shaping up to be a bear flag, when I took profits and waited to clear up any uncertainty. Play the chart, not your feelings. The lack of intense bullish volume and follow through tells me that others see it this way as well. If the market sentiment was that we just bottomed, I would imagine a greater bullish effort.
Considering this correction being a bear flag and there being one more shoe to drop, we can see that it would fall nicely within bullish reversal descending wedge pattern that has been shaping up in wave C, usually since of an at least temporary reversal. I think there is a lot of money on the sidelines aching to get in and when it happens, it might be pretty explosive so you won't want to miss a good entry. A safe entry point would be once this latest bear flag has been invalidated with a large impulse move AND the descending wedge pattern is broken. Then we will begin to look at a mid term play towards $10,000 level where there is a large trendline resistance bearing down since the all time high and has been the upper bound of the bearish market ever since. A more bullish entry point would be near the bottom of the wedge somewhere in the area of $7200-7800, a wide range (I know) but that range will tighten as we get more information. The bottom trendline in the picture has shown support since March 2017 when looking on a log graph (see image below). We can see that there is pretty decent symmetric triangle pattern supported by the aforementioned trendlines. This is typically a continuation pattern of the previous trend which was clearly bullish. If we break the wedge and move towards $10,000, we can expect some heavy resistance in this area and we may range within this triangle through the end of the month so its not a bad idea to take profits near this resistance level, expecting a correction down towards the previous support before advancing. This would allow us one more touch on the bottom support, further strengthening this line as support.
So, where are we now? I expect bitcoin to be up from here in a months time HOWEVER we all know how quick this can change so I would not recommend such a strategy. I'd recommend holding tight and seeing what happens in the coming week. If you are looking for the absolute best price, wait and see what happens with this current bear flag formation and start thinking about your entry points. Looking closely on the 15 min (not shown) on the action within this flag, there seems to be a flat correction going on directly beneath the ascending wedge resistance trendline. If this breaks up out of the flag and through the wedge, everything I just wrote is more or less invalidated unless there is a big pull back.
I hope you enjoyed this analysis. This is just how I see whats going on. Make sure you always do your own analysis and consider the risks before investing.
Peace and love,
crypt0guy
BTCUSD
seems to be nearing the end of its correction its been undertaking since the peak on 2/20. It has made an expanded flat correction with a deep third wave C that did in fact already meet its target of 161.8% of wave B and hit the 61.8% fib retracement level of the previous 5 wave cycle leading to the December peak, but nevertheless
BTCUSD
still appears to have tiny space to fall further, especially with the lack of bullish volume in the current 36 hour correction. Some people have clearly jumped on the wagon already, I know I did before I saw this current correction shaping up to be a bear flag, when I took profits and waited to clear up any uncertainty. Play the chart, not your feelings. The lack of intense bullish volume and follow through tells me that others see it this way as well. If the market sentiment was that we just bottomed, I would imagine a greater bullish effort. Considering this correction being a bear flag and there being one more shoe to drop, we can see that it would fall nicely within bullish reversal descending wedge pattern that has been shaping up in wave C, usually since of an at least temporary reversal. I think there is a lot of money on the sidelines aching to get in and when it happens, it might be pretty explosive so you won't want to miss a good entry. A safe entry point would be once this latest bear flag has been invalidated with a large impulse move AND the descending wedge pattern is broken. Then we will begin to look at a mid term play towards $10,000 level where there is a large trendline resistance bearing down since the all time high and has been the upper bound of the bearish market ever since. A more bullish entry point would be near the bottom of the wedge somewhere in the area of $7200-7800, a wide range (I know) but that range will tighten as we get more information. The bottom trendline in the picture has shown support since March 2017 when looking on a log graph (see image below). We can see that there is pretty decent symmetric triangle pattern supported by the aforementioned trendlines. This is typically a continuation pattern of the previous trend which was clearly bullish. If we break the wedge and move towards $10,000, we can expect some heavy resistance in this area and we may range within this triangle through the end of the month so its not a bad idea to take profits near this resistance level, expecting a correction down towards the previous support before advancing. This would allow us one more touch on the bottom support, further strengthening this line as support.
So, where are we now? I expect bitcoin to be up from here in a months time HOWEVER we all know how quick this can change so I would not recommend such a strategy. I'd recommend holding tight and seeing what happens in the coming week. If you are looking for the absolute best price, wait and see what happens with this current bear flag formation and start thinking about your entry points. Looking closely on the 15 min (not shown) on the action within this flag, there seems to be a flat correction going on directly beneath the ascending wedge resistance trendline. If this breaks up out of the flag and through the wedge, everything I just wrote is more or less invalidated unless there is a big pull back.
I hope you enjoyed this analysis. This is just how I see whats going on. Make sure you always do your own analysis and consider the risks before investing.
Peace and love,
crypt0guy
Comment:
Since this post went up, the consolidation within the current bear flag broke downwards, hitting the bottom of the bear flag channel (one with a bottom parallel with a line touching the two peaks within the flag. This appears to confirm the current move as a flag with a likely break downwards towards the labeled buy area as mentioned. We can continue to tighten this target area as we get more information. The hourly volume has been trending down throughout this pattern, another indication that it is indeed a flag pattern and not a move towards new highs. 1 hr and 4 hr RSI has also cooled off, allowing for another eventual move downwards.