ICP - Measured Move Complete! Pullback to $8.23 then $4.80!?
Updated
ICP executed a beautiful measured move in three legs; a breakout from the first to the second leg with an ascending triangle(per my last analysis), broke resistance, and landed on the measured move target. We're now witnessing a pullback but is that where the drop will end?
How do we trade this? 🤔
We need to wait and see what happens to the price after it interacts with what was previous resistance, around the $8.23 price area. If we get strong support it's reasonable to consider a long scalp. I wouldn't plan a swing trade on this timeframe since the price action has been running hot; three pushes up with a 320% increase in price from bottom to top, RSI went up to 91 and is still at 68.00, now below the moving average, etc.
These data do not support longing, at least on this timeframe. We also do not want to jump into a short right away, the strong sell signal and confirmation candles need to close before we can make such a move. Look for a break below the Resistance Zone and a re-test of the level that fails. A strong bear bar closing on its low at the $7.95 area is enough justification to enter a short. It's reasonable to take 1:1 Risk/Reward level profits around $7.20 and swing the rest to 1:3 or until you see a buy signal.
Until we see the bear confirmation, we ought to remain on the sidelines or zoom into the 5m or 15m timeframes.
đź’ˇ Trade Ideas đź’ˇ
Short Entry: $7.95
🟥 Stop Loss: $8.65
âś… Take Profit: $6.55
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Breakout of Ascending Triangle, Measured Move Up!
2. Measured Move Target Hit, Pullback to Resistance Zone.
3. Watch for Support at Resistance Level $8.23.
4. RSI at 68.00 below Moving Average, Supports Pullback to Resistance Zone.
5. Watch Bitcoin near the $46,000 level, looking for a Trend Change.
đź’° Trading Tip đź’°
Bear flags in the proper context, provide over a 60% probability that a trend will continue. This provides justification to enter a short trade.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like đź‘Ť and comment if you found this analysis useful!
How do we trade this? 🤔
We need to wait and see what happens to the price after it interacts with what was previous resistance, around the $8.23 price area. If we get strong support it's reasonable to consider a long scalp. I wouldn't plan a swing trade on this timeframe since the price action has been running hot; three pushes up with a 320% increase in price from bottom to top, RSI went up to 91 and is still at 68.00, now below the moving average, etc.
These data do not support longing, at least on this timeframe. We also do not want to jump into a short right away, the strong sell signal and confirmation candles need to close before we can make such a move. Look for a break below the Resistance Zone and a re-test of the level that fails. A strong bear bar closing on its low at the $7.95 area is enough justification to enter a short. It's reasonable to take 1:1 Risk/Reward level profits around $7.20 and swing the rest to 1:3 or until you see a buy signal.
Until we see the bear confirmation, we ought to remain on the sidelines or zoom into the 5m or 15m timeframes.
đź’ˇ Trade Ideas đź’ˇ
Short Entry: $7.95
🟥 Stop Loss: $8.65
âś… Take Profit: $6.55
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Breakout of Ascending Triangle, Measured Move Up!
2. Measured Move Target Hit, Pullback to Resistance Zone.
3. Watch for Support at Resistance Level $8.23.
4. RSI at 68.00 below Moving Average, Supports Pullback to Resistance Zone.
5. Watch Bitcoin near the $46,000 level, looking for a Trend Change.
đź’° Trading Tip đź’°
Bear flags in the proper context, provide over a 60% probability that a trend will continue. This provides justification to enter a short trade.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like đź‘Ť and comment if you found this analysis useful!
Note
ICP continues sideways above the Resistance Zone and is failing to rise above the Moving Average on the RSI. We have been close to the Resistance zone, but we need a clean break and close of a strong bear candle to entertain the short idea. We also should not entertain a long until we see some strong support, but I'm not convinced the market will continue to the upside. Several crypto charts, including Bitcoin, seem to be near a major resistance level.
Bitcoin is making another attempt to close the gap to $46,000, a key level that we need to pay attention to. My recent Bitcoin Lifetime analysis depicts the reasons why I believe the crypto market will have a significant pullback before the next round of all-time highs:
Note
ICP is testing the previous high of $11.90 at this moment! This is *not* a moment to long as we may very well be at the top. We have one hour left on this Daily candle and need to see where it closes. If we close below the previous high, watch for the next candles close as this will be most important.
If the next candle closes on or near its high and has a body half the size or more of the current one, then it's reasonable to believe there will be a bit more upside. I recommend only scalping long on this timeframe since we're a ways into the trend.
If the next candles closes on or near their low below the current candles open, prepare for a short. Per my initial analysis, we need a close below the $8.23 area and a retest of the Resistance Zone to confirm a trend reversal and enter a short.
For now, consider long scalping on lower timeframes like the 1HR candles. For shorts, continue to monitor the 4HR and Daily charts for entries based on the discussion here.
Note
ICP dashed to the upside to demarcate the third leg up. Now we need to watch Bitcoin toy with the idea of making it to $46,000 and see what that does to the alt coin market sentiment. As previously mentioned, I would be long scalping the 15m and 1HR chars until we get our trend reversal signal.
-Joe Dean
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