Revealing My Secret Method: Technical Symmetry Analysis
In this post, I'll be sharing a secret tip that I use to identify local tops and bottoms for Bitcoin. With that, I'll also demonstrate how that can be applied to Bitcoin's daily chart in order to explain where we're headed.
Disclaimer: This is not investment advice. This is for educational and entertainment purposes only. I am not responsible for the profits or loss generated from your investments. Trade and invest at your own risk.
The Technical Symmetry
- The basic concept of what I refer to as the technical symmetry is as follows:
- When we see an impulse, or a corrective move that makes a local high or local low, there's a high probability that it'll move up or down once again in the same proportion, regardless of the price action that takes place after a local top or bottom has formed.
- For instance, take a look at the green arrows. We can see that after a small phase of accumulation, the price breaks out, and forms a local top near 42.5k.
- While it does undergo a slight correction afterwards, we can see that the price continues to move upwards in the same direction, with the same degree of strength and momentum.
- The key idea revolving this theory are market trends, and the strength and momentum behind the trend.
- For corrective moves as well, we can also see how they can be applied to identify local bottoms with the arrows marked in red.
Bitcoin Daily Chart Analysis
- Now taking a look at Bitcoin's daily chart, we can see that the current corrective trend we're looking at (arrow D, orange), is very similar to the previous corrective trend (arrow B, red) in many ways.
- Both moves demonstrated a dead cat bounce, and a huge bearish engulfing candle that left a huge downward wick
- So using the technical symmetry theory, we can conclude that a move down to 37.8k is probable.
- This level also aligns with the Fibonacci retracement support of 0.786
- In the previous correction, we also saw Bitcoin bottom out at the 0.786 Fibonacci retracement level, and accumulate as the price ranged between the 0.786 support and the 0.618 resistance.
- As for this short term downtrend, I expect something similar to happen in terms of the price action.
- If we were to break through 61k with strong momentum, and close above those levels on the daily, this scenario would be negated, and we would immediately resume to the bull rally.
- However, I feel that such scenario is less probable. Thus, any bounce we see up to 61k, unless solid confirmation is provided, should be viewed as an opportunity to shave off bags that might be underwater, as they should be interpreted as technical bounces.
- It's also important to understand that such price action on the daily makes sense in terms of the Elliott Wave theory, and Bitcoin's macro bull trend.
- Simply put, we are currently in the process of finalizing wave C from a running flat pattern on the 4th impulse wave.
Macro Elliott Wave Analysis
- On the macro trend, not much has actually changed.
- Despite the fear from market participants, the macro Elliott Wave count remains rather solid.
- As mentioned above, we are currently in the 4th impulse wave, which seems to be a running flat pattern.
Running Flat Pattern Explained
- For those of you who don't know, a running flat pattern is a corrective wave that takes place, in which wave C completes at a higher price than wave A, due to the existing bull sentiment and buy momentum within the market.
- The smaller counts on the daily chart, and the larger trend on the weekly chart suggest that we are merely in a corrective phase within a larger bull trend.
- So going back to Elliott Wave counts, the current trading range on the daily (between 30k and 60k) suggests the following:
- Since wave C must complete at a higher price point than wave A, the price cannot fall below 28.5k.
- Even if the price were to drop to 30k, since it is technically still higher than the price at which wave A was completed, the count would be valid.
- Taking into consideration the fact that this is a running flat pattern, there is no guarantee that we won't touch the untapped demand at upper 30k regions before we resume to a bull trend.
Conclusion
A lot of people are looking for a relief rally to take place, thinking that $47-49k ranges are good buy opportunities. However, knowing that wicks tend to get retested again, and that there's a high probability that we are in a running flat pattern, there's a high probability that we'll be retesting upper 30k regions, specifically the $37.5-37.8k zone as the final price floor before moving onto the fifth impulse wave of this cycle. This would be a scenario that bring maximum pain to market participants, and as such, meticulous risk management will be key to survival.
If you like this educational post, please make sure to like, and follow for more quality content!
If you have any questions or comments, feel free to comment below! :)
Disclaimer: This is not investment advice. This is for educational and entertainment purposes only. I am not responsible for the profits or loss generated from your investments. Trade and invest at your own risk.
The Technical Symmetry
- The basic concept of what I refer to as the technical symmetry is as follows:
- When we see an impulse, or a corrective move that makes a local high or local low, there's a high probability that it'll move up or down once again in the same proportion, regardless of the price action that takes place after a local top or bottom has formed.
- For instance, take a look at the green arrows. We can see that after a small phase of accumulation, the price breaks out, and forms a local top near 42.5k.
- While it does undergo a slight correction afterwards, we can see that the price continues to move upwards in the same direction, with the same degree of strength and momentum.
- The key idea revolving this theory are market trends, and the strength and momentum behind the trend.
- For corrective moves as well, we can also see how they can be applied to identify local bottoms with the arrows marked in red.
Bitcoin Daily Chart Analysis
- Now taking a look at Bitcoin's daily chart, we can see that the current corrective trend we're looking at (arrow D, orange), is very similar to the previous corrective trend (arrow B, red) in many ways.
- Both moves demonstrated a dead cat bounce, and a huge bearish engulfing candle that left a huge downward wick
- So using the technical symmetry theory, we can conclude that a move down to 37.8k is probable.
- This level also aligns with the Fibonacci retracement support of 0.786
- In the previous correction, we also saw Bitcoin bottom out at the 0.786 Fibonacci retracement level, and accumulate as the price ranged between the 0.786 support and the 0.618 resistance.
- As for this short term downtrend, I expect something similar to happen in terms of the price action.
- If we were to break through 61k with strong momentum, and close above those levels on the daily, this scenario would be negated, and we would immediately resume to the bull rally.
- However, I feel that such scenario is less probable. Thus, any bounce we see up to 61k, unless solid confirmation is provided, should be viewed as an opportunity to shave off bags that might be underwater, as they should be interpreted as technical bounces.
- It's also important to understand that such price action on the daily makes sense in terms of the Elliott Wave theory, and Bitcoin's macro bull trend.
- Simply put, we are currently in the process of finalizing wave C from a running flat pattern on the 4th impulse wave.
Macro Elliott Wave Analysis
- On the macro trend, not much has actually changed.
- Despite the fear from market participants, the macro Elliott Wave count remains rather solid.
- As mentioned above, we are currently in the 4th impulse wave, which seems to be a running flat pattern.
Running Flat Pattern Explained
- For those of you who don't know, a running flat pattern is a corrective wave that takes place, in which wave C completes at a higher price than wave A, due to the existing bull sentiment and buy momentum within the market.
- The smaller counts on the daily chart, and the larger trend on the weekly chart suggest that we are merely in a corrective phase within a larger bull trend.
- So going back to Elliott Wave counts, the current trading range on the daily (between 30k and 60k) suggests the following:
- Since wave C must complete at a higher price point than wave A, the price cannot fall below 28.5k.
- Even if the price were to drop to 30k, since it is technically still higher than the price at which wave A was completed, the count would be valid.
- Taking into consideration the fact that this is a running flat pattern, there is no guarantee that we won't touch the untapped demand at upper 30k regions before we resume to a bull trend.
Conclusion
A lot of people are looking for a relief rally to take place, thinking that $47-49k ranges are good buy opportunities. However, knowing that wicks tend to get retested again, and that there's a high probability that we are in a running flat pattern, there's a high probability that we'll be retesting upper 30k regions, specifically the $37.5-37.8k zone as the final price floor before moving onto the fifth impulse wave of this cycle. This would be a scenario that bring maximum pain to market participants, and as such, meticulous risk management will be key to survival.
If you like this educational post, please make sure to like, and follow for more quality content!
If you have any questions or comments, feel free to comment below! :)
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