Bitcoin Structural Wave 5: Foundations For A Crown Reversal?
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New highs yay! Breakout of a previous high is a big buy signal, and on the daily chart its an even bigger signal for swing and breakout traders. However, long term hodling is not advised as risks are high with RSI quickly approaching overbought conditions and profit targets nearby. The threat of a big crown reversal still looms.
With the breakout in our pocket, we can set profit targets at $5439.60 for MIN TP and $6207.70 for MAX TP. It should be noted that we can also imagine a second MAX TP at $8205 (this is a very risky target at this time, as stop-losses may not trigger at the desired price).
We need to watch for a possible structural reversal or an end to the current structural wave 5 between $5540 and $5819, as this is a place where we could form a center crown. If we turn around right now and retrace deeper than the fibo support ($4216.60) area, price action will have invalidated this plan and preparations for a big crown reversal are back on the table (as I thought three weeks ago, remember?).
As for the broader crypto market at this time, a few key fundamentals are prompting what seems to be a short squeeze in pairs matched against BTC (namely, the hard forks). In part, this would explain declines across the alt markets and the increase we are seeing in BTCUSD (i.e., “dominance ratio”). Keep in mind that hard forks and the creation of new altcoins does not amount to “free cash.” Rather, the value of those altcoins is a result of speculative money flows from other parts of the sector or new money from outside. A “QE” analogy is analytically flawed to understanding these kinds of events. Data from CoinMarketCap (coinmarketcap.com/) is showing net inflows accompanying the rising price in the BTCUSD pair, but it is clearly not enough to push prices to rise across the entire sector. As a result, we might see money flow rotation. However, this should not be expected as we have seen many altcoins hit deep retracement technical levels that will be stiff barriers to the formation of new highs.
Cheers and GLWT.
-Erik
With the breakout in our pocket, we can set profit targets at $5439.60 for MIN TP and $6207.70 for MAX TP. It should be noted that we can also imagine a second MAX TP at $8205 (this is a very risky target at this time, as stop-losses may not trigger at the desired price).
We need to watch for a possible structural reversal or an end to the current structural wave 5 between $5540 and $5819, as this is a place where we could form a center crown. If we turn around right now and retrace deeper than the fibo support ($4216.60) area, price action will have invalidated this plan and preparations for a big crown reversal are back on the table (as I thought three weeks ago, remember?).
As for the broader crypto market at this time, a few key fundamentals are prompting what seems to be a short squeeze in pairs matched against BTC (namely, the hard forks). In part, this would explain declines across the alt markets and the increase we are seeing in BTCUSD (i.e., “dominance ratio”). Keep in mind that hard forks and the creation of new altcoins does not amount to “free cash.” Rather, the value of those altcoins is a result of speculative money flows from other parts of the sector or new money from outside. A “QE” analogy is analytically flawed to understanding these kinds of events. Data from CoinMarketCap (coinmarketcap.com/) is showing net inflows accompanying the rising price in the BTCUSD pair, but it is clearly not enough to push prices to rise across the entire sector. As a result, we might see money flow rotation. However, this should not be expected as we have seen many altcoins hit deep retracement technical levels that will be stiff barriers to the formation of new highs.
Cheers and GLWT.
-Erik
Nota
Here's how we can play this on the 1HR. Keep in mind things will happen quicker than how the drawings are on the scale.Nota
Oh my God...Trade chiuso: obiettivo raggiunto
When the impulse wave is $250 on the 1MIN chart... That's enough. Unbelievable ..Nota
SIT. REP.:We made it to our hourly MAX TP last night during that epic rally. By the looks of it, someone is trading our plan :P as we tapered really close to the sell order. We still have part of the breakout trade going toward the MAX TP on the daily chart at $6207. The stop loss on the remaining portion is set at the bottom of the first trading box at $5300. If it happens, it happens.
Looking at the chart, if we head straight up again we have room to reach the designated target without hoping for an upward breach of the big rising wedge pattern we see in the daily. We have two target boxes standing in the way, though, where profit taking is very likely. If you want to trail your stops be careful as you may get prematurely stopped or, worse, sell under your target value.
KEEP IN MIND we are currently trading in a zone where a crown reversal is more likely based on previous BTC patterns.
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We have a bullish flag formation. This will overshoot the daily, so lets let a portion ride further up ;)Nota
Breakout confirmation is $5900 for the bullflag if you still haven't joined.Nota
Ouuu, an interesting twist! Flag failed to breach through the target box resistance. Key levels to watch to the downside:Short box support at $5460
Long box support at $5178 and $5002
Testing the breakout level is normal, will offer re-entry for a swing trade to the daily MAX TP.
If we turnaround right now at $5460, the pattern is another bull flag with the same target as the broken one.
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Updated chart:I forgot to mention that breaking the previous all-time high would validate the crown reversal theory. If so, our purple lines were pretty accurate :)
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Chart for today:- Flag target is modified
- Notice there is now a second crown reversal zone, and our target falls directly in the middle of that.
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Looks like its a nice place to enter right now...Nota
We now have a doji and a red candle appearing on the daily. RSI is making a sell signal. The odds are higher that we will breakdown and retest the breakout level.Nota
Carry forward from the BO level got stopped below the flag.Trade chiuso: stop raggiunto
Nota
Chart for today: Looking for reversals as we hit a fibo extension (the hourly target). The sub=key fibo is broken now, too, so let's watch the breakout level.Nota
One more leg down?Nota
Chart for today: We broke through the falling wedge line :) That was a good entry point, but I would probably take profit right now if I was day trading. These days I'm swing trading so I'm looking for a few more robust signals before jumping in so I can hit the daily and flag targets.Let's look for a higher low.
Another angle
The current candle could easily turn into a doji and then a pin. Also, more often than not, corrections last a few red candles before continuing higher.
Trade attivo
Got the breakout!Nota
Chart for today (Sorry, I couldn't get to this earlier):We have the hourly (fibo extension) and daily (another fibo extension) coming up soon. The risk/reward was kinda crappy buying the breakout today if you are going for these conservative targets.
This is what things may look further up. PS. golden circles are not reliable indicators... I have a way to use them. But even then I am cautious.
Daily RSI said lets go up and we have a nice bullish candle.
Nota
RSI is making a selling signal... Inverted head and shoulders?Trade chiuso: obiettivo raggiunto
Hit the hourly and daily max tp. Wahooo! Let's see what happens next.Nota
New lines and stuff... no hourly TP yet.Nota
Chart for today: Looks like we are forming the inverted head and shoulders. If you want to enter, wait for a break of the golden circle to the upside or a breakout to the upside after the completion of the right shoulder.Be advised, bots will sell into the daily and hourly target, we also have risk posed by a crown reversal area.
Nota
Chart for today:We've broken a support trend line, and the right shoulder never formed. Support ahead: trading range support lines, a sub-key fibo support (a classic support zone), an hourly fibo extension, and the top of the fibo support zone (0.786). Don't forget the white rising wedge line...
Technically we did reach a crown reversal zone in the daily, and as you know in the original post of this thread, on the hourly. So a reversal would not be surprising. RSI is not making a sell signal in the daily yet, but we do have a red candle formed today. This candle needs to be rectified or we'll have more selling :)
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New thread:
Also, here is a 4HR shot including the projected new-all time high along with the expiry of the bullish cycle on the 9th of November.
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For those of you who don't follow me on Steemit:steemit.com/bitcoin/@agencyanalysis/the-crypto-sector-is-lacking-fresh-capital-from-the-outside-or-monday-special-report
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Reached MIN and MAX TP! CHeers. Thread closed.Nota
hahahah its still going! It could still reach the secondary MAX TP at $8205Nota
We are back into the upward channel. If we can break out of this sub-fibo resistance zone and stay in the channel, we could see the rally continue!Trade attivo
Since $7070Nota
If your long, watch for bearish harmonic. If you want to go short, now is your chance!Nota
WOAHHH :D Bearish divergence on RSI? If you are margin long, don't forget bullish cycle expires in a few days.Trade chiuso: stop raggiunto
Use them trailing stops!Trade attivo
Still bullish! Below $7125 we get a little concerned.Trade chiuso: stop raggiunto
Downturn?Nota
Next support is the rising wedge lineTrade attivo
We on the road again?Nota
Watch the $6925 entry level! A breach below will reenter the big rising wedge and make the situation bearish. Otherwise the chart is still bullish.Nota
FANTASTIC... A nice hook, followed by a breakout?Nota
Thread closed. Bullish cycle call was pretty accurate, but only time will tell.
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