BTC bear fractals: confluence or confirmation bias?
Updated
The last week or so has given hope to many that the bottom is in and we are in the accumulation phase. We heard similar rhetoric in January when BTC was hovering around the ~11k mark. Unfortunately for the bulls, this was a costly mistake. And like then, I believe we will see more downside. In fact I see a similar fractal pattern as played out in January where:
I've overlaid the exact price action from ~20k to 6k -- denoted by the 51 bar time range -- and in log it fits strikingly well!
As I said in my title; is this confluence that we will continue to the downside, or is it my own confirmation bias looking for more evidence of a bear market? I believe it is the former, but the following would confirm:
I believe those are the only 2 necessitating conditions for us to see significantly lower priced BTC. See https://www.tradingview.com/chart/BTCUSD/djtqmprI-I-become-death-the-destroyer-of-worlds-BTC-to-3k/ and https://www.tradingview.com/chart/BTCUSD/KhkYOqxo-The-facade-of-a-falling-wedge/ for my thoughts on targets as much of it remains unchanged.
So what would invalidate this?
- We had a roughly 40% drop from the prior high
- We have gone through an ABCDE pennant correction with declining volume
- And the stoch RSI is overbought on the daily
I've overlaid the exact price action from ~20k to 6k -- denoted by the 51 bar time range -- and in log it fits strikingly well!
As I said in my title; is this confluence that we will continue to the downside, or is it my own confirmation bias looking for more evidence of a bear market? I believe it is the former, but the following would confirm:
- We break below the pennant at 6.5k.
- We close below 6.5k on the daily.
I believe those are the only 2 necessitating conditions for us to see significantly lower priced BTC. See https://www.tradingview.com/chart/BTCUSD/djtqmprI-I-become-death-the-destroyer-of-worlds-BTC-to-3k/ and https://www.tradingview.com/chart/BTCUSD/KhkYOqxo-The-facade-of-a-falling-wedge/ for my thoughts on targets as much of it remains unchanged.
So what would invalidate this?
- We break above the pennant decisively at ~7.2k
- We close above 8k on the daily, which would also be above the 20EMA.
Order cancelled
Yep, welcome to cryptoI forgot to mention there was a lot of shorts which are now being squeezed, which has exacerbated the price rise.
Lets see how far this goes.
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