BITCOIN'S DOUBLE BEARISH FORMATION AND DOWNSIDE TARGET
Bitcoin broke out of the rising wedge and had a nice bounce from the 7400 horizontal support level where i did post in my last update that we are likely to get a rejection at the 20 day MA around 8100-8200, and i was not suprised to see price reverse at this levels.
However, the price action at this reversal area appears to be forming another bearish pattern (head and shoulder) which if played out successfully may lead price straight to the sub 6000 levels.
Though the pattern appears blur at the moment as the right shoulder did not completely form from the 8400 resistance level, but this does not completely negate the fact that this pattern is already in motion, and i wouldnt be suprised if price bounces back from the 7361-7400 support level and head back to retest the 20 day MA (thin yellow line) with a wick to the 8400 level (as it happened on the left shoulder) before heading down IMO.
On the contrary, we could just be heading straight down from where we are right now, in which case, extrapolating the distance between the neck and the head of this bearish pattern, a break of the neck line at 7361 will lead price straight to the sub 6000 level between 5800-5500 (area of the box) to complete the wave 2 correction before the next leg up on wave 3.
Going by Bitcoin's price action history, a 40% correction from the local top of 9100 will take us straight to 5500 level which coincides with the 0.618 fib retracement level of the entire move from 3100 low.
Again, the 100 MA (thin purple line), has always acted as a support for every major correction of Bitcoin's price in every bull market, and if this support level holds again, we should expect to see a reversal around the 5800 level.
I would lean more to the 5800-6000 psychological support level as this level, with multiple touch points (reversal points) played a significant role in Bitcoin's price action moves all through the 2018 bear market......
........This is not to say we would get to this level or break this level, or reverse from there, neither is it an investment advice.
This is just my personal opinion based on what is on the chart and Bitcoin's price action history. Pls do your own research as this is a highly speculative market, and nothing is 100% guaranteed.......
NOTE: We must get a reversal at any of the support levels outlined above to get our higher low form on the Weekly time frame for a confirmation of an uptrend market.
A break below 5000 may lead us back into the bear market IMO.
However, the price action at this reversal area appears to be forming another bearish pattern (head and shoulder) which if played out successfully may lead price straight to the sub 6000 levels.
Though the pattern appears blur at the moment as the right shoulder did not completely form from the 8400 resistance level, but this does not completely negate the fact that this pattern is already in motion, and i wouldnt be suprised if price bounces back from the 7361-7400 support level and head back to retest the 20 day MA (thin yellow line) with a wick to the 8400 level (as it happened on the left shoulder) before heading down IMO.
On the contrary, we could just be heading straight down from where we are right now, in which case, extrapolating the distance between the neck and the head of this bearish pattern, a break of the neck line at 7361 will lead price straight to the sub 6000 level between 5800-5500 (area of the box) to complete the wave 2 correction before the next leg up on wave 3.
Going by Bitcoin's price action history, a 40% correction from the local top of 9100 will take us straight to 5500 level which coincides with the 0.618 fib retracement level of the entire move from 3100 low.
Again, the 100 MA (thin purple line), has always acted as a support for every major correction of Bitcoin's price in every bull market, and if this support level holds again, we should expect to see a reversal around the 5800 level.
I would lean more to the 5800-6000 psychological support level as this level, with multiple touch points (reversal points) played a significant role in Bitcoin's price action moves all through the 2018 bear market......
........This is not to say we would get to this level or break this level, or reverse from there, neither is it an investment advice.
This is just my personal opinion based on what is on the chart and Bitcoin's price action history. Pls do your own research as this is a highly speculative market, and nothing is 100% guaranteed.......
NOTE: We must get a reversal at any of the support levels outlined above to get our higher low form on the Weekly time frame for a confirmation of an uptrend market.
A break below 5000 may lead us back into the bear market IMO.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.