BTC – Weekly Inside Bar and Wychoff Accummulation
While the world plunges into a complex array of issues that threaten social destabilization across multiple fronts, Bitcoin has shown an unexpected level of resiliency. Through the past two weeks is has climbed from 53.4k to 67.4k and in so doing has confirmed a large Inside Bar in the weekly timeframe (orange circle). This is a bullish formation, typically demonstrating a trend reversal and in this case, comes after 16 weeks of a 3-3-5 Flat Correction.
What’s more, when we look at the daily chart, one can see a pretty clear impulsive 5-wave pattern to the upside from the low, demonstrating a notable change in sentiment. However, through the corrective period a well defined Head and Shoulders pattern has completed, with confirmed resistance of the neckline through July 6-12. That projects a deeper correction down below the 45.4k level, or towards the 1.618 projection of the A-wave from B (the top of the H&S pattern), which target also happens to be coincident with the S3 support level of the weekly pivot.
The inside bar is strong though, and price moved quickly back to test the 0.236 level of the declining channel. In doing so, BTC has reclaimed many critical levels including the 1W 12MA, the 1W 20MA, and the weekly Pivot point all now offering support. And as I’ve pointed out in my last post, historically, between a Halving and the next market top, the BTC price has never closed below the lower level of the weekly Bollinger Band, which now currently sits at 58.4k and has only dipped below 52.85 on the RSI once before (from which it launched strongly to a new market top).
In fact, even when one looks at the Wychoff model for Accummulation/Distribution, we can make a strong case that we are only just completing the Accumulation stage in preparation for significant price appreciation, with Distribution phases still well into the future.
So, what do you think? Was the break of the neckline a false signal and we are about to take a moon shot, or is this rally just a bull-trap and a deeper correction will follow?
What’s more, when we look at the daily chart, one can see a pretty clear impulsive 5-wave pattern to the upside from the low, demonstrating a notable change in sentiment. However, through the corrective period a well defined Head and Shoulders pattern has completed, with confirmed resistance of the neckline through July 6-12. That projects a deeper correction down below the 45.4k level, or towards the 1.618 projection of the A-wave from B (the top of the H&S pattern), which target also happens to be coincident with the S3 support level of the weekly pivot.
The inside bar is strong though, and price moved quickly back to test the 0.236 level of the declining channel. In doing so, BTC has reclaimed many critical levels including the 1W 12MA, the 1W 20MA, and the weekly Pivot point all now offering support. And as I’ve pointed out in my last post, historically, between a Halving and the next market top, the BTC price has never closed below the lower level of the weekly Bollinger Band, which now currently sits at 58.4k and has only dipped below 52.85 on the RSI once before (from which it launched strongly to a new market top).
In fact, even when one looks at the Wychoff model for Accummulation/Distribution, we can make a strong case that we are only just completing the Accumulation stage in preparation for significant price appreciation, with Distribution phases still well into the future.
So, what do you think? Was the break of the neckline a false signal and we are about to take a moon shot, or is this rally just a bull-trap and a deeper correction will follow?
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