Just thought I would post an interesting state of the market, since we see a rare case of inverse head & shoulder vs head & shoulder. In which, the market is trying to compete for the right shoulder.
My personal interpretation is that the market is keen to do a recovery from 6k and we are seeing alot of excited buyers. But it is having a hard time trying to find the money to do so, and am slowly running out of steam. Whether a valid pattern or not, the appearance of the H&S is a sign of losing momentum. There are couple of reasons for this lost of momentum but the strongest reasons is that there are a lot resistance above so this is very different from 2017 where there was nothing above. When there is no resistance, you can make all kinds of prediction. $100,000, $200,000, $300,000 or whatever pleases you, and the market will buy the hot potato to whatever their intended target is. But now in the recovery phase, we need alot alot of money to really buy out the resistance above and the lack in volume is not a good sign of buying confidence.
Still buyers are being stubborn, so I could be wrong. Maybe the confidence is in, we are just taking a very slow approach. Some upside is that price has constantly made a higher low despite the increased selling, so that tells us that buyers are actually holding and maybe absorbing the dip. But in order for them to continue holding, there needs to be a catalyst that would give us the much needed volume surge and maybe that is what they are waiting on. If that's the case then we will likely go extended sideways, hunting stop loss between $8000 and $8600. This will skew both the H&S patterns out of shape.
Until then, I'm still leaning on the bear side and betting on the H&S right shoulder to form downwards in the next major sell off.
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The inverse H&S completed when it touched 9k but instead of breaking through with volume and getting supported on the neckline, it fell through and hidden bearish divergence are starting to show up the 4H and Daily. Lower time frame still shows hope for bulls but not looking too hot.
The short term momentum is shifting towards bearish now, just waiting on a confirmation when 8600 and 8400 breaks. Once that two break, I am expecting selling pressure to accelerate downwards.
If we don't touch 9k again then expect a much stronger selling pressure.
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Bulls still fighting hard for $8400, we are seeing some small bounces but shorts are beginning to pile up fast. I see in pp lTA that they always like to see history repeating themselves, so I thought I would add one too!
Very unpredictable moves from BTC, frankly I am unclear if I read the market wrongly or its just masterful play from the chess master. But BTC continues to move upwards against bearish momentum over and over again.
The Stoch RSI on the daily is now in overbought region, but its unclear if that is indicating bull strength or bearish incoming. Nonetheless, a downtick is waiting to happen. BTC is currently at 9.7k and this will be interesting to see how things play out near the 10k resistance. s3.amazonaws.com/tradingview/snapshots/s/SrDocD5z.png
Personally I'm having a hard time buying back in because BTC shot to 5k last fall and corrected back to 3k, its previous high. Then it shot to 20k....and so far has only corrected back to 6k, not 5k, its actual previous low. I'm open to BTC heading sideways for a few weeks and then back up, but it still seems odd that it never went back to 5k. Closest it got on GDAX was when it retraced to $5600 from 8k
avito1
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The lack of a double bottom is concerning... what are your thoughts... I just feel the dump incoming on every mooning red candle...
GramTooNoob
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@avito1, very unexpected move upwards. but unless it can breaks 10k it won't be mooning. I'm keeping an eye on the growing bearish divergence in the daily, so I am treating this as one final pump before the dump. Similar to the pumps in December.
gorkaran
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I thought you are not sharing your charts and hence didn't checked it.
Good to see you mate.
GramTooNoob
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@gorkaran, I thought it would be fun to predict the reversal bottom. Too bad, it weren't the real bottom. Bad analysis again =(
gorkaran
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@GramTooNoob, Yea, I see so many ellliott wave trader and everyone has different count.
But good point is as a wave trader we know when our count is wrong and we can still make money. In this fall I doubled my BTC stack even though my analysis are often getting wrong.
RickyParker
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Go to sleep
avito1
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Good morning... What am I missing? Some higher time frame I should be considering? Shouldnt we be heading towards Wave C (4 hour chart) 7.5k. There seems to be a bullish flag... Sideways trading seems to have extended wave B?
We are getting drawn back to the 200 EMA on the daily... Broke the 17k long term down trend line again (Im quite sure it was broken briefly yesterday)... fakeout?.... its starting to feel like the 12k trap... or are we headed towards the 11.5k range (from the 20k long term down trend line)...
FXKhaos
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Good morning. From +2GMT. Very interesting state of affairs. Is there any anticipated negative developments due, like further curbing or controlling Crypto by some governments or big banks? That would easily tip the scale towards a bearish tilt. Would be interested in your thoughts, you seem highly clued up on crypto than most. Do you trade any other instruments as well? Anyway, enjoy you day further.
GramTooNoob
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@FXKhaos, Just increasing call for regulation. It is normally a positive development but given the inflated state of crypto, it can be regarded as a call to curb the volatility. At the moment, it is just a lack of development both in the price and real world adoption that is disappointing investors. The only positive development is that retail investors believe whales are accumulating here and will soon send the price higher. How true is that? We are waiting to find out.