Bitcoin is currently consolidating in a bearish flag (purple lines). This often marks the halfway point of a move. We are also currently in a descending right angled broadening wedge (dashed lines) which is typically bullish according to Thomas Bulkowski. I don't anticipate a break upwards on this, however if we do then consider taking a position above the top trendline on the pullback with a stop right under that line. My two more likely scenarios are forming an inverse head and shoulders or a further decline to new lows. The most likely trajectory is the bold red line.
Scenario #1: this flag breaks bearish and lands us right near the February bottom of ~$5800. This would also be the bottom trendline of the megaphone shaped descending right angled broadening wedge. It is typically recommended to play these patterns at the third bottom touch and seeing that it is also the $5800 area bottom, we might see a lot of activity in this area and is a strong buy recommendation with a stop just below the bottom trendline of the megaphone. If it bounces up here, then move your stop loss up below every MAJOR consolidation on the way up. I cannot definitively say anything about where a sell target is on this move so my best recommendation is to follow it because this might in fact be the bottom we are looking for. The IHS should terminate near the major bearish trendline that has contained the market since the all time high. We will likely be rejected at first and if you want to protect profits then take them at this trendline and re-enter if we break through.
Scenario #2: flag breaks bearish but IHS fails to form in which case, wherever we get rejected we would be headed to new lows where the next good buying opportunity would be near the support trendline since February 24th. This would also complete the descending wedge pattern forming since then and is also a strong buy opportunity with a stop not to far below that trendline support because if we fail there then who know where we are headed. However, if we break back into the wedge, then consider re-entering. I play conservatively and have no problem losing some potential profits on that.
Peace & Love,
crypt0guy
Scenario #1: this flag breaks bearish and lands us right near the February bottom of ~$5800. This would also be the bottom trendline of the megaphone shaped descending right angled broadening wedge. It is typically recommended to play these patterns at the third bottom touch and seeing that it is also the $5800 area bottom, we might see a lot of activity in this area and is a strong buy recommendation with a stop just below the bottom trendline of the megaphone. If it bounces up here, then move your stop loss up below every MAJOR consolidation on the way up. I cannot definitively say anything about where a sell target is on this move so my best recommendation is to follow it because this might in fact be the bottom we are looking for. The IHS should terminate near the major bearish trendline that has contained the market since the all time high. We will likely be rejected at first and if you want to protect profits then take them at this trendline and re-enter if we break through.
Scenario #2: flag breaks bearish but IHS fails to form in which case, wherever we get rejected we would be headed to new lows where the next good buying opportunity would be near the support trendline since February 24th. This would also complete the descending wedge pattern forming since then and is also a strong buy opportunity with a stop not to far below that trendline support because if we fail there then who know where we are headed. However, if we break back into the wedge, then consider re-entering. I play conservatively and have no problem losing some potential profits on that.
Peace & Love,
crypt0guy
