Following the 3 Arrows collapse in June we formed falling wedge one.This bullish formation lasted almost 6 months as we consolidated down to breakout at the turn of the year.
Prior to breaking the upper trendline price broke through the 20 week and 50 week moving average and this set of circumstances is being repeated in the current price move labelled on the chart as Inflection Point 1 (IP-1) and Inflection Point 2 (IP-2). Yet again we are consolidating in falling wedge two with price getting ready to challenge the 20 and 50 week moving averages.
Whilst a lot less time has been invested into the current wedge it has formed above the 200 week average so the major resistance point of the previous breakout isn't in play here.
If we are to break up my target is the unfilled CME gap started at $34.5k. If we fail to break the moving averages but stay above the lower trendline the potential break remains in play but if we break down and close a weekly candle below the trendline the theory will be invalidated meaning a weekly close under the trendline would be my stop loss.
Drop your thoughts below.
Prior to breaking the upper trendline price broke through the 20 week and 50 week moving average and this set of circumstances is being repeated in the current price move labelled on the chart as Inflection Point 1 (IP-1) and Inflection Point 2 (IP-2). Yet again we are consolidating in falling wedge two with price getting ready to challenge the 20 and 50 week moving averages.
Whilst a lot less time has been invested into the current wedge it has formed above the 200 week average so the major resistance point of the previous breakout isn't in play here.
If we are to break up my target is the unfilled CME gap started at $34.5k. If we fail to break the moving averages but stay above the lower trendline the potential break remains in play but if we break down and close a weekly candle below the trendline the theory will be invalidated meaning a weekly close under the trendline would be my stop loss.
Drop your thoughts below.