bearish continuation trade
We are currently in a consolidation and many are accumulating at this area expecting price to rise and repeat the same behavior it did after the last descending triangle was broken. It's very possible that this happens again, but if that's the case I would expect a few more weeks of consolidation between the .5 and .618 fib retracement zones drawn out above.
That said I believe we will see bullish attempts to break out as we did recently that are absorbed by large players that are looking to buy at a more attractive price. If we see the consolidation start to lean more toward the lower end of the consolidation zone at the 7.8k region we increase the chances of a downside impulse.
A break of the .5 resistance zone it would lead us into an area of previous congestion/indecision, making it hard to identify targets and low risk/reward setups for trades. A break of the .618 to the downside would have us moving toward the next level of interest at the previous 6.2k level where we saw a very long drawn out consolidation. That level is also the .768 fib retracement and it's very common, in new cycle, for the correction to touch that level.
Given that the levels are clear and risk is very low if the exit is at the 9k levels, this is a favorable trade and while it seems that it's a 50 50 chance it will happen it is worth a shot.
Invalidation is 9k level out of the current consolidation WITH HIGH BUY VOLUME on high time frames. Also if price consolidates longer than 1-1.5 more weeks and starts to curve slowly upward (bulls absorbing sell order flow) I would be more weary that this is an accumulation before a bullish impulse.
That said I believe we will see bullish attempts to break out as we did recently that are absorbed by large players that are looking to buy at a more attractive price. If we see the consolidation start to lean more toward the lower end of the consolidation zone at the 7.8k region we increase the chances of a downside impulse.
A break of the .5 resistance zone it would lead us into an area of previous congestion/indecision, making it hard to identify targets and low risk/reward setups for trades. A break of the .618 to the downside would have us moving toward the next level of interest at the previous 6.2k level where we saw a very long drawn out consolidation. That level is also the .768 fib retracement and it's very common, in new cycle, for the correction to touch that level.
Given that the levels are clear and risk is very low if the exit is at the 9k levels, this is a favorable trade and while it seems that it's a 50 50 chance it will happen it is worth a shot.
Invalidation is 9k level out of the current consolidation WITH HIGH BUY VOLUME on high time frames. Also if price consolidates longer than 1-1.5 more weeks and starts to curve slowly upward (bulls absorbing sell order flow) I would be more weary that this is an accumulation before a bullish impulse.
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