[BTC] Bullish Fractals on Collision Course with 200-D SMA?
Updated
My last BTC post mentioned the running triangle formation signalling continuation just after price rocketed upward on 4/12. That continuation eventually reversed at the dark red resistance line.
I've noticed the same running triangle pattern may be forming on the larger consolidation we're going through right now. FRACTALS!
Just for education purposes, the running triangle is essentially a symmetrical triangle (continuation pattern). The difference is that wave B ends higher than the beginning of wave A. The rest of the pattern looks the same as an ordinary symmetrical triangle.
I noticed that this pattern is the same that occurred during the reversal of the low of $6000 on 2/6. Eventually this continuation run exceeded target price by a little. Another note, I remember that the consolidation back then was crazy and frustrating for traders gauge, just as is it is now.
Now, the real kicker is that the target price zone between the 1.618 and 2.0 fib extension (green box) is right where the 200-day MA is about to meander through. That makes an ideal top and target price to shoot for, if this running triangle formation does in fact breakout.
HOWEVER, this assumes that price will breakout of both the bright red downtrend resistance from the ATH and the thin dark red resistance. That's going to be a feat and a half. So take precautions, wait for the breakout before initiating longs, reduce your risk.
This also aligns with ongoing idea of a long-term Adam&Eve reversal formation, quite nicely actually, the lines that I've kept on this chart since the $6400 lines aren't based on anything but forward-looking visualization of the pattern. Coincidentally though, the rounded "Eve" bottom is filling out quite well, but anything could happen in crypto!
I've noticed the same running triangle pattern may be forming on the larger consolidation we're going through right now. FRACTALS!
Just for education purposes, the running triangle is essentially a symmetrical triangle (continuation pattern). The difference is that wave B ends higher than the beginning of wave A. The rest of the pattern looks the same as an ordinary symmetrical triangle.
I noticed that this pattern is the same that occurred during the reversal of the low of $6000 on 2/6. Eventually this continuation run exceeded target price by a little. Another note, I remember that the consolidation back then was crazy and frustrating for traders gauge, just as is it is now.
Now, the real kicker is that the target price zone between the 1.618 and 2.0 fib extension (green box) is right where the 200-day MA is about to meander through. That makes an ideal top and target price to shoot for, if this running triangle formation does in fact breakout.
HOWEVER, this assumes that price will breakout of both the bright red downtrend resistance from the ATH and the thin dark red resistance. That's going to be a feat and a half. So take precautions, wait for the breakout before initiating longs, reduce your risk.
This also aligns with ongoing idea of a long-term Adam&Eve reversal formation, quite nicely actually, the lines that I've kept on this chart since the $6400 lines aren't based on anything but forward-looking visualization of the pattern. Coincidentally though, the rounded "Eve" bottom is filling out quite well, but anything could happen in crypto!
Note
Looks like another burst upwards right up against the all-important red downward trendline! We've broken out of the white triangle I've drawn, but that wasn't a definitive resistance line since its so close to the more important red one. I'm not convinced price will breakthrough the red resistance line right now, so no trades here until it does with significant volume.As long as price stays below the recent highs, this triangle can still be valid. I expect one more leg downwards before going back to try to break through the strong downtrend line.
Note
No active trade yet. Still inside the triangle, as expected. Price has inched its way up to the bright red downtrend line where it's facing resistance. Going into final wave E, it's possible to see some mid-wave consolidation before completion. If price breaks down from the triangle after wave E, this trade would be invalidated and downside movement could be dramatic. Otherwise, breakout above the bright red resistance following wave E will be signal to go long. I've updated some lines on the triangle, here's a closer look:
Order cancelled
The running triangle formation is invalidated, the wave D extended above wave B. It did jump up above the strong resistance line and now seeing resistance of the dark red upward trendline right above it. It seems that this upward leg is overextended, I wouldn't be surprised if we see a harder correction from this level.Long trades from the downtrend breakout should have stops for sure at breakeven. I personally rather just stay in the sidelines till a confident support above dark red trendline.
Note
Just as I thought may be the case, BTC was overextended in the rally and is falling from the Dark Red trendline which supported it until now.
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