BTC : Completed H&S leads to healthy intermediate term basing
Updated
Bitcoin (BTC) appears to be about halfway through a healthy and technically classic basing phase. In the past few months it broke above its sharpest declining trendline, and then hugged that line while establishing both a less sharp declining trendline and a short term Inverse Head & Shoulders pattern. That H&S pattern has now played to completion, slightly exceeding it's traditional upside target. So we now find ourselves doing a bit of "back and fill" basing action at a higher level. In the process price moved above the 150 day moving average, and the 13 day exponential moving average sprinted to that exact same level. We are currently testing that as support, which also aligns with other recent broken price resistance.
Will it hold? Maybe, but I lean toward a break still lower. The highly important 50 day exponential moving average has, importantly, shifted to an upward trajectory - however it still trades below the 150 day average by quite a bit. It's logical to me that the bears will force a test of that moving average before the bulls can get the upper hand again. This would be healthy, and build more support as the bulls bide time for a likely "golden crossover" of the 50 and 150 day averages later this Fall.
In a bigger timeframe, it's very easy to see that the last 5 months of basing action "could" be forming a much larger timeframe Inverse Head & Shoulders pattern. If so, the small completed version of this pattern would define the low price extreme. Only time will tell, but I like what I see so far. This would imply a breakout in very late 2018 or early 2019 and should be followed by short term consolidation at a higher level before trending higher.
My price targets:
2018 High
minimum - 9500
maximum - 12000
2019 High
minimum - 24000
maximum - ???
Will it hold? Maybe, but I lean toward a break still lower. The highly important 50 day exponential moving average has, importantly, shifted to an upward trajectory - however it still trades below the 150 day average by quite a bit. It's logical to me that the bears will force a test of that moving average before the bulls can get the upper hand again. This would be healthy, and build more support as the bulls bide time for a likely "golden crossover" of the 50 and 150 day averages later this Fall.
In a bigger timeframe, it's very easy to see that the last 5 months of basing action "could" be forming a much larger timeframe Inverse Head & Shoulders pattern. If so, the small completed version of this pattern would define the low price extreme. Only time will tell, but I like what I see so far. This would imply a breakout in very late 2018 or early 2019 and should be followed by short term consolidation at a higher level before trending higher.
My price targets:
2018 High
minimum - 9500
maximum - 12000
2019 High
minimum - 24000
maximum - ???
Trade active
As I suspected in last comments, this first run above then down to the 150 day moving average as support did not hold. It was an important battle move, but more time is necessary. Today we logically slipped down a bit, to find the 50 day moving average in a blink and of course it aligns with logical horizontal support.So again... will it hold? 50/50 are the odds I'd give it. Of course our long side eyes want to see it hold, but ultimately it's a coin flip. To be honest, and break and fall back to test that H&S neckline is very likely and would have long term positive affect by washing out a few (or more than a few) more weak hands.
This is classic technical basing following a harsh period of bear dominance.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.