Chart Pattern Analysis of Bitcoin

K3 break up and closed upon K1, it seems that the uptrend will accelerate here.
K3 is also the first successful test (relatively low volume) of the nearest support.
But, K4 denied these expectations immediately.

K3 and K4 touched the nearest downtrend line.
K4 showed that the supply pressure sharply dropped to the lowest level.

We can prepare to buy here (26575-26100), stop loss set at 25700.
Or we wait for K5 to decide to buy in or not.

K5 will be most likely a second test of the support.
If the test is also low volume similar to K3, we can buy there.

K3 and K4 is a dead corner, if K5 break up and close upon K4,
the uptrend will most likely accelerate immediately.
We can also buy there.

Note

I am expecting a second successful test of the support to buy in.
K5 here tell me the retest is still on the way, and had not ended yet.
Good news is that the supply pressure is very low and is not expanding.

We can continue hold long position, and try to buy here (26500-26100), stop loss set at 25700.
Or we wait for K6 to decide to buy in or not.

K6 is most likely the last candle of the retrace action.
If the test is also low volume similar to K3, we can buy there.

If K6 break up and close upon K4,
the uptrend will most likely recover and accelerate immediately.
We can also buy there.

Note

K4 break up the dead corner and the nearest downtrend line with high volume, but failed to close upon K2.
It is not an ideal breakup.
If we had bought in, We can adjust the stop loss at 26120.

K4 verified that the supply pressure had temporarily recovered.
If the short term uptrend(from K0 to K4) want to go on,
Close price of coming days should not return back into the downtrend line.
And the supply pressure should not continue or expand.

Note

K3 and K4 breakup a pennant, and also turned the previous resistance line to a support line.
Price target of the pennant is at about 28300, which is also 0.618fib line of the nearest downtrend.
If we had bought in earlier, we should prepare to get out of the market and put selling orders there.

The breaking up of K3 and K4 attracted much demand.
However, the volume of k3 is less than the supply level of k0.
It’s the first signal of weakness.
The volume of the short term uptrend(K1 to K4) is also decreasing.
It’s a second signal of weakness.
A group of long upper shadows of the uptrend candles is the third signal of weakness.

So, I don’t think the short term uptrend will expand its scale.
It will most likely shrink and stop at 0.618-0.786fib area.

Note

K2 and K3 is a harami pattern.
The short term pricing up momentum was stopped here by the pattern.
From K1 to K3 , the supply pressure and demand pressure are temporarily in balance.
Fake up action will most likely happen when the price up to touch the downtrend line in the coming days.
If we had bought in earlier, we’d better prepare to get out of the market there.

If K4 close below K3, the bear trend will most likely recover immediately.

Note

K4 close below K3, and from K2 to K4 is an evening star pattern.
However, the volume of K4 is lower than K2, it is not a standard reverse pattern.
And, the supply pressure from k1 to K4 is decreasing.
the supply level is less than the nearest demand level.
Besides, the retrace from K2 to K4 stopped at 0.5fib line of the nearest uptrend.
So, I don’t think this reverse pattern had terminate the short term uptrend.
The short term bull force is still in control.
If we want to short it, we need to wait for more evidence.
If we want to buy here, stop loss set at 26200.

Note

K4 and K5 is a harami pattern.
The short term pricing down momentum was temporily stopped by the pattern.
If we had bought in, stop loss set at 26375.
I don’t know where it will go next.
Perhaps K6 will choose a direction.

Note

K6 failed to break up or break down.
The lowest level volume means the supply and demand pressure exausted.
There are three candles stay upon 0.618fib line of the nearest uptrend.
Price up to test the upper price of K4 will most likely happen in the following candle.

If K7 couldn’t close upon K4 , I will try to short it there.
If K7 close below 0.5fib line, the nearest uptrend will be terminated.

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