Bitcoin - The Breakdown
That took a while ... wedges/triangles can be so frustrating as you wait for it to play out.
So it finally broke the wedge and stopped right at where we saw support in the last update. I think we will see the following play out:
1. Expect a second bull trap ... stochastics look very oversold on the lower time frames so I wouldn't be suprised for them to correct upwards. Some consolidation and the price to challenge the break down price of the previous wedge. That was a serious wedge, it flipped a lot of people bullish. If you zoom out to a 3D or weekly view, this wedge looks like a clear wave 4. Wave 4s are a pain to trade because it can retrace wave 3 from shallow to deep. We retraced deep and on lower time frames actually broke above the 618 fib. You can see on the chart it just sat right on top. And then we broke below ... trapping some people up there. I think the 618 will be pretty good resistance and a great area to short for those who do that.
2. After the challenge fails, we should see pick up in volume and a pretty fast melt down. Everyone caught in the wedge/bull traps will begin to exit. I dont think we make many rest stops on the way down. Any retrace back up should be sold off quickly.
3. Target the swing lows that started it all .... $4000-$4500 ... I am considering 2 things ... either the low being around $4500 because a ton of people probably have buy orders at $4000 expecting a double bottom. Maybe the exchanges and super whales dont give people the satisfaction and spike the price higher before.
Or, we run down hard and smash the low as every buy order gets stopped out. And we reach $3200, and see what happens from there.
So, since its impossible to pinpoint an exact low, I think the safe thing to do is start scaling in at the $4500 area and wait to see technically what the price is doing.
So it finally broke the wedge and stopped right at where we saw support in the last update. I think we will see the following play out:
1. Expect a second bull trap ... stochastics look very oversold on the lower time frames so I wouldn't be suprised for them to correct upwards. Some consolidation and the price to challenge the break down price of the previous wedge. That was a serious wedge, it flipped a lot of people bullish. If you zoom out to a 3D or weekly view, this wedge looks like a clear wave 4. Wave 4s are a pain to trade because it can retrace wave 3 from shallow to deep. We retraced deep and on lower time frames actually broke above the 618 fib. You can see on the chart it just sat right on top. And then we broke below ... trapping some people up there. I think the 618 will be pretty good resistance and a great area to short for those who do that.
2. After the challenge fails, we should see pick up in volume and a pretty fast melt down. Everyone caught in the wedge/bull traps will begin to exit. I dont think we make many rest stops on the way down. Any retrace back up should be sold off quickly.
3. Target the swing lows that started it all .... $4000-$4500 ... I am considering 2 things ... either the low being around $4500 because a ton of people probably have buy orders at $4000 expecting a double bottom. Maybe the exchanges and super whales dont give people the satisfaction and spike the price higher before.
Or, we run down hard and smash the low as every buy order gets stopped out. And we reach $3200, and see what happens from there.
So, since its impossible to pinpoint an exact low, I think the safe thing to do is start scaling in at the $4500 area and wait to see technically what the price is doing.
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