The play i showed a few days ago played out but has not reached it’s target yet. A very important factor now is, will it be able to reach the target or not. If it can’t move up, it means the market is not strong enough and we can see some panic selling again. The market took some big hits the past few weeks and does not just simply forget that. So when patterns like this start to fail, we can see panic selling happening ( pattern).
So at the moment it’s difficult to say what will play out on the short term. We can see a clear on the right and the possible on the left. This says we need one more wave up, but that is not always the case. During extreme weakness, it could simply just drop out of it now. Normally, maybe 80% of the time we would see one more wave up. Just see some weakness at the moment that i am not sure it will happen. Hanging around the support line for a few hours already, usually a sign there is no power to push it up.
Low time frame we have a small range between 4200 and 4300. A break of 4300 could mean the will make that last wave up, a break of 4200 will probably mean what i mentioned above. The target of the is still around 4600, therefore i though we should have had a bigger correction yesterday to around 4000//3950, make a solid there and make that last move up towards the target. But never went that low and started to move up quickly again. This looks like strength but that is not always the case.
Bigger picture plan i had in mind, was either turning down again from the 4600ish to the 3K levels again, or to make a right shoulder if it would stay above the 4200ish for a big . This is not that likely, because that would mean a V shape low will happen. Indicating the crash mode is already over and done with. Anything can happen in crypto, but i don’t think this is very likely to happen. But just being prepared for all options.
At the moment it looks like we have a triangle in the making on the low time frame, this might give a break of the 4200/4300 range. If we get above or below this range, things might get clearer. Alts are not giving any clear signs as well, some look quite good but others did not even move up the past 2 days like ETH’. A few show bull flags in the making while others (like XRP’) show bear flags. Like LTC’ and NEO’ show possible forming, with only the neckline that has to break. So i do not see clear signs yet that the market is willing to make another push up. A break of these bull flags/ would give a much better indication.
For me it means, that if we can not even get above the 4450ish, it will be a sign and probably start to drop again with the high being set at 4400. If we do reach the 4600 it will depend on where the correction down will go from there. At the moment i can not give a long term direction, IMO it would be crazy to even try that. I prefer to do it step by step for the time being. We have at least a solid low now, a good around 3500. So even if we start to drop, we could be forming higher lows from now. 3800ish would be a good level to form that higher low. In case we drop big and hard and even break that support, i would probably mean this whole up move was just a big correction (the one i mentioned the past week) and that we see another big drop below the 3500.
So if we move up but price slows down around 4450/4500, the big will probably be in play (blue line). If we break the 4200ish now, the red line might be in play. It might be an important day, which can give us a probable direction for the coming week or so. As i am finishing up this analysis, we have made a small bounce up, which gives the blue line and the from the chart on the right a new chance to succeed.
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Comment: If we drop back below the 4250ish, it might be it was NOT a triangle but simply just a bear flag. So the coming few minutes could already give a very good indication on which scenario might play out.
When looking at the volume, it also shows yesterdays rally is loosing strength. So normally only a volume boost could give this more chance to move up
Comment: This is what i mean with the ALts, some look bullish but other do not look that great.
Comment: To give a visualization of the possible inverse H&S. But there is still a very long way to go. A move to 4600 (neckline) has to happen withing the next 24 hours.
Comment: For the short term, there is a possibility for ascending triangles. On the left we can see a smaller one as well. For this to succeed, we need to see a touch close to the high again. So movement like the blue line. If it fails to get close to the high, something like the red line, it will make another drop.
At the moment it’s staying close to the resistance of that bear flag i mentioned above. So there is chance it will make a move upwards and invalidate that bear flag
Comment: The first attempt to move up inside the wedge has failed already. Volume was low and therefore not enough support to move higher. At the moment it’s at the support zone again. If this breaks, the 4100 might give support again, but i think that might crack. So there is a chance the upwards movement is over already if the 4200 breaks. Still a lot of noise on the lower time frame as we can see with that bear flag. It broke up but dropped again just as fast.
The uptrend support line of Bitfinex is at the same spot as this support line of the wedge we can see here
Comment: These potential triangles can still work out, not likely but if we see a big bounce happen here, than at least we know what is going on
Comment: Dropped to the 4100 and bounced up quite good so far. But this could turn into a H&S if we drop to the neckline again at 4100. If that happens, a target of 3800 gets triggered. If we drop to that level, it might mean very bad news, as i mentioned in my original analysis. That level is support, but depending on the volume and bearish strength of the potential drop, we can make a decent estimate if the 3800 support wil break or not.
Comment: At the moment alts are not dropping yet, bulls are trying to prevent a drop to 4100 again. So it could mean it will fail. But the right shoulder can still take many hours though. We could see one more wave up, but if we see too much strength, it probably means somethings else is going on.
So a max of 4280ish, can still work, but a break of 4300 means it’s 80% sure over with the H&S.
If the bulls can fight off this H&S, i don’t think we will see any big movements. Bigger picture shows a potential big bull flag (4400/4100). Probably means we keep moving inside of that flag for another day or so.
On the Bitfinex chart we can see the selling volume on these drops have not been that high. When the channel broke there is no panic selling to be seen. This is in favor of the bulls. But all these up movements can still just be a retest of former support. Which is perfectly normal as well. But if we start to drop again, volume has to increase for the bears.