BitcoinShort
Bitcoin: Learning From Past Mistakes 4H (May 06)
X Force Global Analysis:
Bitcoin is currently consolidating within a triangle pattern, creating lower highs and higher lows. While this may appear to be a bullish pattern on the surface, it's important that we learn from our past mistakes and ensure that we interpret the market conditions as accurately as possible.
Analysis
- On the left hand side, we have fractals from November, 2019
- We not only see a visual similarity, but the same wave counts as well
- Elliott Triangle Waves (ABCDE) can be counted within the consolidating phase of the triangle
- Each Triangle Wave can be divided into zig zags (ABC) waves
- Despite a textbook Elliott Triangle Wave count being a bullish one, leading to a breakout
- We actually saw a break down from the consolidation pattern, leading to a huge downtrend
- In this fractal, we can see that the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) also show similarities
- The RSI creates lower highs and lower lows
- The MACD shows bearish histograms after a death cross, consistently failing to form a golden cross for a reversal
- This demonstrates that there is lack of strength and momentum to support a bullish breakout
- It's also important to consider the fact that we are overextended in terms of the macro trend perspective
What We Believe
While this may appear as a bullish pennant on the surface, fractals from the past demonstrate that this pattern could eventually signal a bearish trend reversal. It's also important to note that the sentiment is overly bullish, and we are overextended and overbought on the mid-term timeframes.
Trade Safe.
Bitcoin is currently consolidating within a triangle pattern, creating lower highs and higher lows. While this may appear to be a bullish pattern on the surface, it's important that we learn from our past mistakes and ensure that we interpret the market conditions as accurately as possible.
Analysis
- On the left hand side, we have fractals from November, 2019
- We not only see a visual similarity, but the same wave counts as well
- Elliott Triangle Waves (ABCDE) can be counted within the consolidating phase of the triangle
- Each Triangle Wave can be divided into zig zags (ABC) waves
- Despite a textbook Elliott Triangle Wave count being a bullish one, leading to a breakout
- We actually saw a break down from the consolidation pattern, leading to a huge downtrend
- In this fractal, we can see that the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) also show similarities
- The RSI creates lower highs and lower lows
- The MACD shows bearish histograms after a death cross, consistently failing to form a golden cross for a reversal
- This demonstrates that there is lack of strength and momentum to support a bullish breakout
- It's also important to consider the fact that we are overextended in terms of the macro trend perspective
What We Believe
While this may appear as a bullish pennant on the surface, fractals from the past demonstrate that this pattern could eventually signal a bearish trend reversal. It's also important to note that the sentiment is overly bullish, and we are overextended and overbought on the mid-term timeframes.
Trade Safe.
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