Short

Updated

BTC: Symmetrical triangle fractals - 8k a possibility

It's been a very difficult time to be trading BTC over the past few weeks. It's shown signs of weakness with rising wedges, but also signs of strength with a few pops above the 4HR 20 and 50 moving averages.

I have been updating my macro view with some of the micro movements and patterns here:

BTC; The bull forest from the bear trees!

However, I thought it was time to take another look at it with a clean chart and fresh eyes.

I still see a huge descending wedge, which is a fantastically bullish setup, but within that, I see symmetrical triangle fractals.

The first symmetrical triangle took us from ~20k to 10.7k in a matter of 5 days. It then formed into a second smaller triangle that took us from 13.5k to 9.3k over 2 days.

The smaller triangle has an almost identical price pathway that is nearing the top edge and I'd expect it to retest the lower edge at around 10.6k for support. If the support doesn't hold, I believe we will be going down to ~8k, which will be the lower edge of the larger rising wedge.

If we indeed hit this target and bounce convincingly, I believe this would be a very bullish sign. At the very least, a swing to 12k to test resistance would be in play.

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Something else to throw into the mix is the weekly chart:

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If the 20MA doesn't hold, it will be taking a trip down to see the 50MA; ~6k

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The 1HR is now below the 200MA and we are headed to test the triangle for support again around $11.6k - $11.7k

This will most likely result in a death cross (200MA crossing the 20MA), further adding to the downward momentum. I believe we break the triangle support within the next ~8hrs.

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As suspected, we were rejected by the MA's

Now this is when we retest the bottom of the triangle at $10.6k - $10.7k (not $11.7k which I erroneously said in my last comment).

I believe it will have a small bounce there, and then drop hard.

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So we have well and truly broken out of the triangle and we are approaching the 200MA as anticipated.

I expect some kind of bounce from 200MA but I'm unsure at this stage if it will be sustained or just another dead cat. Once we get closer to that stage I will update you all.

The worry is that now we have broken the 20MA on the weekly, the 50MA is in play. This results in a lower target of 5k-6.5k

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So we ended up bouncing perfectly on the daily 200MA

I still feel this is only a temporary reprieve, and that the bigger weekly 50MA is still in play.

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It looks like we may be working on a rising wedge now:

The apex is at 10k. I think that area is now going to be significant resistance considering how much support it previously provided.

Even though we hit the target on the daily time frame, I can't help but think the weekly ~6k-7k is still in play.

We will know more within the next day or so, since we will have our weekly close and potentially a completed rising wedge.

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So the rising wedge broke out of D. I've mentioned a number of times in the past that cryptos tend to be impatient and break the trend earlier. However, the alternative here is that it could be creating a flag instead of a wedge:

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Trade closed: target reached

I have more to say about the current trend, however I will start a new idea since the target that was outlined in the original chart has been hit.

I hope you were either able to short and make money on the way down, or preserve capital by getting out in time.

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Check out my new idea that draws on Bitfinex margin data:

BTC margin long volume vs price on Bitfinex

crimsonronin

Related publications

BTC; The bull forest from the bear trees!

by crimsonronin

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