Bitcoin Flags Out, Continuing The Pattern! (BTC)
Updated
Hi friends! Welcome to this update analysis on Bitcoin! Let's get right to it! Looking at the four hour chart, you can see that we continue to consolidate in a bear flag below the key moving averages. Currently, the 20 EMA (in blue) is beginning to cross into the flag body, so it could end up being the downward catalyst again, as it has been for all of the prior bear flags on this chart.
As a refresher on the pattern that I've been covering, I'll walk you through it from the beginning. On the left middle of the chart, the pattern starts with a bear flag which produced a spike down (pink arrow,) followed by a rally above the 50 EMA (purple arc,) followed by a bear flag that dropped below the 20 EMA (in blue.) From there, we saw a spike back above the EMAs, and then a big drop before the pattern began to repeat itself.
If you look at the big bear flag in the pattern, you can see that it began with a smaller bear flag, right after the spike. So, right now, we're forming a bear flag right after the most recent spike. Sure, the movement after the spike was a little extended, but it was generally the same, and that's what matters here. Now that we're forming a bear flag after the spike, we need to be on the lookout for a continuation breakdown, similar to what we saw after the first spike. Also, if you look at the time that has elapsed from the bottom of the first bear flag to the beginning of the selloff after the first spike, the time between the bottom of the big bear flag, and now, is relatively close. Therefore, we should see some selling emerge, if this pattern is going to continue. The 20 and 50 EMAs are moving into the bear flag, and the top of the newly formed downtrend channel are fast approaching. Any one of those overhead resistance levels could produce a breakdown to the red neckline of the head and shoulders pattern. From there, we will have to assess how price reacts to that level. A breakdown would be very bearish, and it could follow the general breakdown path that I've outlined on the chart, in red and green arrows.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-Magic loves you-
-JD-
As a refresher on the pattern that I've been covering, I'll walk you through it from the beginning. On the left middle of the chart, the pattern starts with a bear flag which produced a spike down (pink arrow,) followed by a rally above the 50 EMA (purple arc,) followed by a bear flag that dropped below the 20 EMA (in blue.) From there, we saw a spike back above the EMAs, and then a big drop before the pattern began to repeat itself.
If you look at the big bear flag in the pattern, you can see that it began with a smaller bear flag, right after the spike. So, right now, we're forming a bear flag right after the most recent spike. Sure, the movement after the spike was a little extended, but it was generally the same, and that's what matters here. Now that we're forming a bear flag after the spike, we need to be on the lookout for a continuation breakdown, similar to what we saw after the first spike. Also, if you look at the time that has elapsed from the bottom of the first bear flag to the beginning of the selloff after the first spike, the time between the bottom of the big bear flag, and now, is relatively close. Therefore, we should see some selling emerge, if this pattern is going to continue. The 20 and 50 EMAs are moving into the bear flag, and the top of the newly formed downtrend channel are fast approaching. Any one of those overhead resistance levels could produce a breakdown to the red neckline of the head and shoulders pattern. From there, we will have to assess how price reacts to that level. A breakdown would be very bearish, and it could follow the general breakdown path that I've outlined on the chart, in red and green arrows.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-Magic loves you-
-JD-
Note
The update is here!
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