Fractal Pennants, coming in for the second drop!

6 apr 2018

In some of my earlier posts, I wrote about a pennant that had been forming, denoted by the black resistance line and the dashed gray line. Soon after, the pennant broke to the downside, resulting in a 22.6% drop in price. The end of the fall coincided perfectly to create a brand new pennant, denoted by the solid black support line as well. BTC tried to rally back to the top of the pennant, but failed extremely early in the wave, even earlier than the failed drive on the last pennant did. Since the last pennant had a failed drive to the top, shortly followed by a break down, and we see an even weaker price action in BTC now, I can say with moderate confidence that this pennant will probably break down as well. I would set an entry order for a large short position right about 6,350, and stay in cash for now as we wait for the breakdown. BTC struggled along the bottom of the last pennant for a few days, so don't worry if BTC hesitates at the bottom. Happy trading!