Crypto Market analysis - Total 2
TOTAL2 has been a very reliable chart to base the bull runs on. We're looking at it now to see where we could potentially reverse. For this chart to be bearish, we would have to take out the low at 850 billion. As long as we put a higher low above that, the chart will remain bullish in the longer term.
Between August and November, we went through an accumulation phase, where we put consecutive higher lows after completing a bullish harmonic. We can also see that from the low to the first higher low, before breaking out of the exponential down curve, we retraced a perfect 0.786, which is very typical of a wave 2 retracement. If you then take the Fibonacci extension levels from the high to the low, we hit a perfect 4.618 extension, which is uncommon but very possible for a wave 3 extension. This would currently put us in a wave 4 correction.
We have retraced and have today cut through the 0.382 retracement level and are sitting at the 1.26 support. However, this isn't a reliable support, as it only acted as resistance in the past and has never been held as support. We could, therefore, expect to go lower, and the next level would be the 0.5 retracement level at 1.21 trillion.
For a wave 4, it is common to retrace between the 0.5 and 0.618, and the 0.618 is around 1.11 trillion, which is where the next zone of support sits. I would, therefore, find it possible, if not probable, to retrace all the way down to the 0.618 at 1.11 trillion dollars and accumulate within that zone of support before the next substantial rally.
The next substantial rally will hopefully bring us to all-time highs, but it does not necessarily have to do that. We could retrace and put in another lower high, which would, at that point, confirm distribution and likely indicate a mid-to-long-term pause in the bull market, if not a reversal into a bear market. Until this happens, or we take out the low at 850, we remain bullish.
The last points to consider are that we didn't distribute at the highs and didn't have a major liquidation event, this suggests that these assets will revisit the highs or have deep retraces into them. We are also developing bullish divergence which will mature as long as we stay above 850 b. For that reason, we are not selling anything at these prices.
Conclusion
Between August and November, we went through an accumulation phase, where we put consecutive higher lows after completing a bullish harmonic. We can also see that from the low to the first higher low, before breaking out of the exponential down curve, we retraced a perfect 0.786, which is very typical of a wave 2 retracement. If you then take the Fibonacci extension levels from the high to the low, we hit a perfect 4.618 extension, which is uncommon but very possible for a wave 3 extension. This would currently put us in a wave 4 correction.
We have retraced and have today cut through the 0.382 retracement level and are sitting at the 1.26 support. However, this isn't a reliable support, as it only acted as resistance in the past and has never been held as support. We could, therefore, expect to go lower, and the next level would be the 0.5 retracement level at 1.21 trillion.
For a wave 4, it is common to retrace between the 0.5 and 0.618, and the 0.618 is around 1.11 trillion, which is where the next zone of support sits. I would, therefore, find it possible, if not probable, to retrace all the way down to the 0.618 at 1.11 trillion dollars and accumulate within that zone of support before the next substantial rally.
The next substantial rally will hopefully bring us to all-time highs, but it does not necessarily have to do that. We could retrace and put in another lower high, which would, at that point, confirm distribution and likely indicate a mid-to-long-term pause in the bull market, if not a reversal into a bear market. Until this happens, or we take out the low at 850, we remain bullish.
The last points to consider are that we didn't distribute at the highs and didn't have a major liquidation event, this suggests that these assets will revisit the highs or have deep retraces into them. We are also developing bullish divergence which will mature as long as we stay above 850 b. For that reason, we are not selling anything at these prices.
Conclusion
- Analyze prices carefully around these levels:
- The current support at 1.26.
- The next support at 1.11 trillion.
- Look for TOTAL2 to showcase bullish accumulation or reversal.
- Once TOTAL2 signals its direction, focus on individual assets that align with the macro trend.
- Updates on specific positions will follow.
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