Hello Friends and welcome to an updated analysis on Bitcoin. At this point we have touched our Diamond Bottom Target twice. This is where if trading this pattern I'd take profit. The primary reason for this is the Ascending Wedge (orange with blue lines) or Rising Wedge as some call it. I originally thought we were forming an ascending triange but alas it has morphed into a rising wedge.
If you don't know the difference between an ascending triangle (Bullish) and an ascending wedge (Bearish) PM me or comment and I'm happy to explain.
The interesting thing is that this ascending wedge meets up perfectly with the edge of the downtrend line (red dotted line). That is unignorably bearish, I agree. However, I am a big believer in the diamond bottom as a reversal pattern, also the MACD has been in a Symmetrical Triangle for the entire correction from the ATH and it JUST broke to the upside during the breakout of the Diamond Bottom. For these reasons I am long on bitcoin and I think the bottom is in. We are currently forming one HUGE symmetrical Triangle between the rising and falling long-term trend lines (Red Dotted Lines).
My expectation is that we will correct inside the triangle to the target of the Orange Ascending Wedge, which also corresponds to the .236 fib retrace, which is also VERY close to the Top of the Diamond Bottom. That is a perfect spot to create another higher low, and break out of this HUGE Symmetrical Triangle to start our next bull run to 30k-40k.
Overall I am Bullish, I think there is going to be a heathly bearish move, followed by a breakout of the HUGE triangle. If the Diamond is invalidated I may think twice, but otherwise I see a beautiful reversal taking place.
Remember this is just for educational purposes only, I am not trading bitcoin personally, I use it mainly for a market indicator. You should do your own research before trading yourself.
Well like it if you like it and comment if you have a question!
I'm your Falcon Bottom Finder, always looking for THE best entry!
-D
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WARNING: We did not see the Ascending Wedge break out to it's full potential. Now I see a potential H&S reversal pattern forming on the 4h timeframe that could send us lower to the 7,400-7,300 area. Beware if we break below the neckline. Keep a close eye on the 8k level today and tomorrow.
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Looks like a Head and shoulders to me. Should expect a larger correction than originally thought but we’ll see if it breaks the top of the diamond.
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Just wanted to put up an update of something I am seeing across the market right now. Also, something that is making me think BULLISH. This is a potential Inverse H&S. The really fun part is that the Target of the Descending Wedge that I posted about last week matches up perfectly with this potential inverse H&S. I LOVE when patterns line up with each other and confirm them. We will see how this plays out.
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We didn't see the ascending wedge break to full potential, but thats fine, not all patterns breakout, and not all patterns break to full potential. Now we are testing that HUGE symmetrical triangle we talked about... hoping to see a break here, but there may be a retracement before we are ready to break. Either way, you can feel the sentiment changing across the market! The Blind Bull sees! I've said it once, and I'll say it again. I'm a big fan of the Diamond Bottom. #FalconBottomFinder
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We just had our first retrace after so many green candles and it looks like we tested the Diamond Pattern Target as support. We are now watching that .5 fib retrace and the 9k area very closely. I knew it would act as resistance at first, but I hear stampeding hoofs. It sounds like the Bulls are near! Let's watch as this unfolds.
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Alright, look at bitcoin cruising higher and higher, can’t you feel those permabears transforming? ... there’s a metaphorphasis in the markets.
We found that the .5 retrace and the 9k level offered some resistance at first but has now turned to support as we move higher still, forming higher highs and higher lows in relation to that diamond bottom.
Next level of interest is the .618 retrace right around the 9,600-9,700 level. Once thought there we should head to our Decending Wedge target in the 10k’s I’m already hearing the FOMO start up especially in the crypto twitter realm. The smart money is flooding in, and the noobie money will follow.
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Expecting some consolidation at the .786 retrace here in the 9,600-9,700 zone. Then next stop is the descending wedge target.
Nice job man. I'm waiting for this correction too!
Poukitoun
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Nice one! I believe after reaching the resistance we will go down another time to finalise the Elliot triangle corrective wave. This should give us more momentum :)
DHuts
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@Poukitoun, I was just reading this analysis! Not a bad thought! However, I would counter with an alternate count ;) I think instead of an ABCDE correction we will see a standard ABC correction from the ATH. If you start your next 1-5 count at your C leg, you will start your 0 at the C point then your D drawn here is the 1. The top of the diamond bottom pattern or the ascending triangle target then becomes your 2 then with the 3 we break from the triangle. I believe the bullish correction has already occurred. I think the Eliot count has already reset. Thanks for commenting your thought!
Poukitoun
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@DHuts, Yes I see what you mean, for now though I think the most important for me is BTC remaining between the triangle, anything under the support line and we might get in deep trouble. It would me MA50 and MA100 would be under MA200 = Long term bear market. To confirm continuation of bull marker we still need to break quite a few resistance lines. We will see how it plays out :) good luck!
DHuts
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@Poukitoun, agreed! If we break the top of the diamond bottom then I would expect another test of the rising long-term support. I definitely concure with your thought on the MA’s but remember MA’s follow price action so they become less significant the closer you are to a reversal. They can verify a reversal, but they do not predict them. I think your Elliot wave count of the daily is excellently drawn and visually you have mapped the sub ABCD corrections perfectly for each of your ABC correction legs so I can’t disagree with your idea, it is certainly logical. It will be interesting to see how this plays out! I agree with that there are several areas of overhead resistance, but there always are in the shadow of an ATH, we may need to have more bull blood in the water before the market is ready to rise again but I see the sentiment changing already and with more and more larger capital firms like Barclays establishing crypto trading desk I think this is where my TA and FA start to converge and make me think that the reversal has begun. It’s a mixed bag at this point, it will be interesting to see how it plays out! Thank you for your positive contributions to the conversation! Definitely provides food for thought!
DHuts
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@Poukitoun, looks like this is playing out very bullishly, the EMAs are fanning long term bullish. I hope you bought in at the break of the downtrend line cause this is gearing up to be a fun time. I guess even a blind bull finds a nut every once in a while huh? Haha I think I’m saying that right ;) haha
Poukitoun
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@DHuts, yes I am all in, I had some fiat on the side but I have put all back in cryptos. Nothing worst than missing the train! and this is a fast train! ;)
DHuts
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Wow what a pump! Now I’ll be watching for further confirmation and I’ll be watching that 9k level very closely. I love that we are above the downtrend channel but we can’t get too excited yet. Again, I’m long and I think the bottom is in, so all good signs here, but just be cautions, I don’t love how much momentum we’ve seen without any corrections establishing support but I’m still very optimistic.