Bitcoin's ascending triangle (continuation or reversal?)
Good day Traders
Bitcoin had the retracement we were looking for although it did arrive with a rock hard landing, finding support at our daily SMA100, and it seems we're now in a corrective phase after reaching $4200 for a double top, and what looks like resistance for a large ascending triangle, which has become apparent now that this move has played out.
Ascending triangles can either be a continuation pattern, or a trend reversal pattern, so this really can go either way.
I'm now expecting a 50 fib retracement of wave A to around $4k, before concluding the corrective phase with a drop to our daily SMA50 and ascending triangle support somewhere around $3550/$3650.
We should then bounce from triangle support and make a decisive move towards our SMA128 resistance, which has been significant S/R if you look back. This will also be a 3rd attempt at the $4200 ascending triangle resistance, but the difference this time is that we will be meeting major trend line resistance from our ATH. I'm still not convinced that we can break through that resistance and we will need a strong volume profile to get the job done.
If we do manage a breakout to the upside, we have a minimum upside target of $5200, which is based on the height of the triangle and would mean a retest of our daily SMA200.
If we can't break resistance, we may consolidate along the ATH descending trendline before dropping back to support and breaking down for a crash to around $2800 which is our first profit target, and also based on the height of the triangle.
We should then either retrace back to our weekly SMA200 (+- $3270) or we will consolidate briefly, similarly to when we had brief consolidation around $5600, before continuing the drop to $2400, bouncing to retest our $2800 resistance, before crashing (capitulation?) to our $1800/$2000 support, and potentially lower.
The grey price bars were copied from our November 2018 drop, which is the height of the pole for the second profit target, and fits the scenario quite well.
Good luck and happy trading!
Previous chart:
Bitcoin had the retracement we were looking for although it did arrive with a rock hard landing, finding support at our daily SMA100, and it seems we're now in a corrective phase after reaching $4200 for a double top, and what looks like resistance for a large ascending triangle, which has become apparent now that this move has played out.
Ascending triangles can either be a continuation pattern, or a trend reversal pattern, so this really can go either way.
I'm now expecting a 50 fib retracement of wave A to around $4k, before concluding the corrective phase with a drop to our daily SMA50 and ascending triangle support somewhere around $3550/$3650.
We should then bounce from triangle support and make a decisive move towards our SMA128 resistance, which has been significant S/R if you look back. This will also be a 3rd attempt at the $4200 ascending triangle resistance, but the difference this time is that we will be meeting major trend line resistance from our ATH. I'm still not convinced that we can break through that resistance and we will need a strong volume profile to get the job done.
If we do manage a breakout to the upside, we have a minimum upside target of $5200, which is based on the height of the triangle and would mean a retest of our daily SMA200.
If we can't break resistance, we may consolidate along the ATH descending trendline before dropping back to support and breaking down for a crash to around $2800 which is our first profit target, and also based on the height of the triangle.
We should then either retrace back to our weekly SMA200 (+- $3270) or we will consolidate briefly, similarly to when we had brief consolidation around $5600, before continuing the drop to $2400, bouncing to retest our $2800 resistance, before crashing (capitulation?) to our $1800/$2000 support, and potentially lower.
The grey price bars were copied from our November 2018 drop, which is the height of the pole for the second profit target, and fits the scenario quite well.
Good luck and happy trading!
Previous chart:
Trade closed: target reached:
Closed long positions
