Bitcoin Dump to 6000 while making a Bullish Wedge
Updated
Has been a slow, low volume week with wick all over the place and together with fake moves. Seems yesterday we have seen the last trap move, since we have some real follow through for the first time. I showed a possible double bottom in the making in my channel earlier today at 7300/280 which could also turn into a descending triangle as you can see on the left. Now past hour, it is starting to look like it doesn't want to drop, so there is a chance it might still break up. Think that will only create like a right shoulder for an H&S pattern.
As you can see, i think we have an important range now, between 7280ish and 7450ish. If the right shoulder forms, price has to stay below the red zone, so max 7450. Assuming market is bearish i see these 2 options:
1), The triangle breaks down, so we simply drop from current prices
2), Triangle breaks up, makes that right shoulder with max 7450 and then breaks down
I wrote a lot about the low volume past days, during the move up. That it's just not the way for the market to move upwards. But Bitcoin just kept on moving up after each attempt from the bears, price just got pushed back up. Because of the low volume, it can be easily manipulated, but usually it's always a matter of time. Markets can't rally with low volume. Only problem is, where and when does it turn. Think with yesterday's trap move to 7700 the high is set, assuming the 7450 will hold from now on.
On the right we can see a possible bullish wegde in the making. If it's a real one, we should be seeing a big drop coming week, towards the 6000. With a wedge, a false breakout happens often, so a wick below 6000 can also easily happen. All of this, is still within the bear trap move of that big H&S i showed a few weeks ago. With the drop to 6500 being the first wave, now patiently waiting for the second and usually (if the bear trap is real) THE low. It's important to see volume increase if we drop withing the wedge, but we do NOT want to see it increase the volume high of past month. With the exception if we see a false breakout of the wedge and we see a very high volume fight at that low. Problem is, you can't judge it upfront, one has to see the switch from high sell to high buy volume at the moment itself.
In general, i have mentioned several times that i am very worried about the low volume we have seen in the market past months. We saw this the second half year of 2018 as well and we know what happened after. So for me, at this point, the H&S bear trap and this possible bullish wedge, are the tools that the Bitcoin bulls have left coming weeks/months to prevent another bear market.
Previous analysis:
As you can see, i think we have an important range now, between 7280ish and 7450ish. If the right shoulder forms, price has to stay below the red zone, so max 7450. Assuming market is bearish i see these 2 options:
1), The triangle breaks down, so we simply drop from current prices
2), Triangle breaks up, makes that right shoulder with max 7450 and then breaks down
I wrote a lot about the low volume past days, during the move up. That it's just not the way for the market to move upwards. But Bitcoin just kept on moving up after each attempt from the bears, price just got pushed back up. Because of the low volume, it can be easily manipulated, but usually it's always a matter of time. Markets can't rally with low volume. Only problem is, where and when does it turn. Think with yesterday's trap move to 7700 the high is set, assuming the 7450 will hold from now on.
On the right we can see a possible bullish wegde in the making. If it's a real one, we should be seeing a big drop coming week, towards the 6000. With a wedge, a false breakout happens often, so a wick below 6000 can also easily happen. All of this, is still within the bear trap move of that big H&S i showed a few weeks ago. With the drop to 6500 being the first wave, now patiently waiting for the second and usually (if the bear trap is real) THE low. It's important to see volume increase if we drop withing the wedge, but we do NOT want to see it increase the volume high of past month. With the exception if we see a false breakout of the wedge and we see a very high volume fight at that low. Problem is, you can't judge it upfront, one has to see the switch from high sell to high buy volume at the moment itself.
In general, i have mentioned several times that i am very worried about the low volume we have seen in the market past months. We saw this the second half year of 2018 as well and we know what happened after. So for me, at this point, the H&S bear trap and this possible bullish wedge, are the tools that the Bitcoin bulls have left coming weeks/months to prevent another bear market.
Previous analysis:
Note
Broke the support yesterday but have not followed through yet. Still hanging below the new resistance now around 7250/320. Bears need to keep it below this zone to keep the price action in their control. I expected to see price drop a bit more and sooner, so it could be a hidden sign that it has not happen yet. Just a bit premature to think that already, so for now assumption is that we are just flagging below the resistance now. This triangle on the daily, is also showing a target around the 6000. Here we can see that its support broke already, but no volume or follow through yet. Could mean its all just a retest and small consolidation. but for the triangle to be real, it needs to happen soon AND volume really needs to make a significant increase as well, reaching that blue zon. If we see that happen coming 24hours, while making a big drop, than the 6000ish zone will become very likely. As you can see, this triangle fits the picture of the possible bullish wedge quite well.
The wedge is still an assumption, still need to see it get formed before acting on it.
Note
Bitcoin fractal update :
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