I wanted to make this post to track both potential formations and their progress. According to stockcharts.com (sources below) "volume plays an important role in the Top, it plays a crucial role in the Bottom"
For the left shoulder and formation of the head: "Volume on the decline of the left shoulder is usually pretty heavy and selling pressure quite intense." and "After this low, subsequent patterns should be watched carefully to look for expansion during the advances."
For the second half of the head and formation of the right shoulder: "The advance from the low of the head should show an increase in ," "After the reaction high forms the second neckline point, the right shoulder's decline should be accompanied with light volume" and "With light on the pullback, indicators like CMF and OBV should remain strong. The most important moment for occurs on the advance from the low of the right shoulder. For a breakout to be considered valid, there needs to be an expansion of on the advance and during the breakout."
Clearly we can see heavy on the decline of the left shoulder("A") and from it's decline towards the head ("B"), and even relatively light on the slope towards the second neckline point ("C"). However, this is where I begin to see the divergence in trend. We should expect high on the advance of the right shoulder, towards point "E", and that is not quite the case. For me to consider the pattern valid, we would need to see a break of the green on STRONG .
Example from stockcharts.com: https://i.gyazo.com/7ae05e5e41b99767dc3e...
"Ideally, but not always, during the advance of the left shoulder should be higher than during the advance of the head." As we can see, has been on a steady decline since point "C".
Confirmation of this pattern will come with a close (4 hour or daily) below the red forming the neckline.
Example from stockcharts.com: https://i.gyazo.com/10b0a9b1434ed7b385a1...
If I were to take a position on one pattern or the other, I would use the other patterns as the stop loss. At it's current position, if I were to go long I would set stops below $8,100 or $8,000. If I were to go short, I would set stops above $8,900.
These patterns are appearing all over crypto right now, in alt-coin/usd pairs as well as alt/btc pairs (see my post linked below for an older post on ETH/USD). Look around and see which ones you like, or which confirm first (if at all). I will continue to update as this progresses.
*THIS IS NOT TRADING ADVICE*
I was going nuts trying to identify how those perfect waves were being formed and fanned out starting around Feb 6th (I honestly thought it was too mechanical to be natural and started thinking it was market manipulation). Just today found those compressed / fanned out waves to be consistent with an inverted cup and handle pattern. In the case of the inverted cup we may be forming here, this would be a bearish signal. Be careful!
I also think the sharp dip we just saw to $6k could be completed out with an inverted adam and eve double bottom. So many possibilities.
I haven't been in this game long enough to know, but I wonder if those fractal wave patterns are typical of a priceline when it is most volatile, or most overbought/oversold.
Any ideas on that?
Thanks for the posts!
If you look at my last post, i have a zoomed-in marked up capture of the patterns I'm talking about. Very fractal.
Any case, I saw some similar patterns near the ATH.