tigerpause
Short

XBTUSD BTCUSD bearish pennant detailed analysis

BITMEX:XBTUSD   Bitcoin / US Dollar Perpetual Inverse Swap Contract
I have been tracking a bearish pennant on XBTUSD for a number of days and it has just crossed the 3/4 duration marker, which means that it is likely to resolve soon. We are currently trapped below the 0.382 fib and even if we break into it again then we're rapidly running out of space in the pennant ; it will resolve (one way or the other) by 2nd Feb. This pattern seems to meet the criteria of a bearish pennant:
1) strong bearish trend with heavy sell volume to form the pole
2) volume decreasing during the congestion period, i.e. throughout the period trapped in the pennant
3) relatively short term duration in comparison to a triangle
4) triangles normally resolves between 1/2 and 3/4 duration but a pennant usually resolve after the 3/4 point has been reached

I measured the XY move and copied that to an approximate breakout point and that results in a target price of around $7500, which aligns with the confluence of both the 0.786 fib level and the 1D 200 MA, so it feels like it could be a reasonable target to shoot at.
Comment: Tentative signs of a breakout of the pennant as anticipated. Too early to call it. We need to break through support at around 10.4 before i'll be convinced.
Trade active: Entry price: 10621
Target exit price: 7900
Reasons for target exit price:
1) Support is showing on the 4D chart at 7866
2) The 200 MA is currently at 7750

Good luck!
Comment: Trade progressing very well now. There shouldn't be much in the way of resistance below 9.8 so the rate of loss may accelerate. It's possible that I'm not being optimistic enough on the downside and 5.5k might be on if the fib level and 1D 200 MA don't hold but i would be reasonably surprised by that. Good luck!
Comment:
Comment: Sorry - i'd messed up the short position tool in the previous image - here's a corrected one:
Comment: Trade progressing very nicely now. It took a while to get through the band of support between around 10.2 and 9.8 but hopefully we're now trapped below 9.8 and we'll see further downside movement towards my short target around 7.8
Comment: Apparently a little excursion up to 10.3k was required in order to rest the bears a little but they came back strong and we closed last night below 10k. Currently trading at 9244 (XBTUSD) and I'm hoping for a little recovery up to 9.8-10k to enter a short trade down to 7.9 (short target updated as the moving average is increasing slowly).
Comment: Test the bottom of the green fib level now. I wouldn't be surprised either with a temporary recovery up to 9.8-10k and then down again but neither would i be surprised by a breakthrough to 7.9k, i'm waiting to see.
Comment:
Trade closed: target reached: Target reached, trade closed. We're at the 1D 200 MA support line. Let's see what happens next; reversal to bull trend or continuation of bear?
what an absolute mess
+1 Reply
tigerpause robandlee
@robandlee, but a pretty accurate one, which i think might be important
+1 Reply
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