$BTC #Bitcoin - Head and Shoulders wishful thinking - EXPLAINED!Hello Lads and Ladies,
Everyone is looking at the possible Head and Shoulders formation playing out and I have to admit that I was one of the first people to call this formation but as soon as I started seeing this TA almost EVERYWHERE, I got very sceptical and started looking for reasons against my own TA.
First of all, this is the ugliest and weirdest HnS formation I have ever seen. We have clear breakouts from this formation, with these breakouts a double bottom at our new support, the tips of the shoulder do not match and also the bounces and volume lack completely. In my opinion this HnS is simply wishful thinking.
The very first thing that should have happened is a clear rejection from the neckline and a very steep drop.
If you watched the price and the drops, we basically had small 100-250$ drops followed by a sidewards movement. This is not how this formation should play out. We should see nice and steady drops with very small stops but not take two days to decide what to do and then start climbing down.**Again, this is exactly what I mean with KNOW YOUR CHART - you might see candles and base your TA on it but only from that you don't know what happened "inside" this candle so assumptions only based on single candles is not very reliable (See also the last green candle that touched the 6800$ as we talked about it, this was only in the last 15 min of the day but it is displayed as if the whole day was just going up..)**
This is already weird but still alright as long as we are going down. So the next step would have been to fall down to 6150-6050 (like the left shoulder) and then have a bounce above the candle which touched the "bottom". Again.. we saw a 250$ bounce which took almost more than 24h and during that time we have crossed 6150 multiple times and even touched 6100 yesterday. Now with all sanity, is this what should happen in a HnS formation? Is this how you bounce? Is this HnS formation still valid? ABSOLUTELY NOT.
What people expect here to happen is a beautiful bounce, a trend reversal, a movement to 7k and maybe the end of he bear market, unfortunately in my opinion everyone betting on this scenario will get slapped in the face harder than expected. I can tell you why.
For this very beautiful scenario to happen we REALLY need to find a strong bottom. First of all, since when is $6100 a bottom..? We have set a new bottom at $5800 and first we need to confirm that this is the bottom we are looking for. To confirm this, we need too come down to it again. As I see it, this MIGHT be our bottom but I consider to it a higher chance to be "the bottom before the bottom" (M.Slogget) and the longer it takes us to get to it and we keep climbing down stairs, the deeper we will go.
The reason for this is very simple and can be explained with something everyone knows here - the market bloodbath. To find a bottom we have to crash REALLY hard, we have to see these double digit negative numbers again to be really at a bottom and then not just for one day but 2-4 days straight red digits, so we are REALLY REALLY at the bottom, all indicators are down and everything is set to go up because there is nowhere else to go.
I HOPED, that we will see that whenever we touch the neckline and everything will start crashing at that point. Instead what we saw was more comparable to an easy walk down the stairs with a complete lack of any volume and momentum. The awaited $1000 bounce was only 250$ high and took two days - this is ridiculous.
