Bullish trend resumed; however correction should be near
Updated
So we had an impulse wave, it was not an ABC correction. After a couple of whale pumps and short liquidations, what initially seemed to be an ABC wave was in fact a 4th wave of an impulse wave. Even if the volume was not so big, RSI nearly overbought and resistances strong, we've managed to cross some important levels, exited above the uptrend channel and heading now towards $9500.
That means a bullish trend resume, but however be careful with some aspects. First, we are in a big rising wedge. We've already had 3 bear traps after the first big pump, but this one should be for real because of the following reasons:
1. Wave 5 if it's correctly drawn on my chart is near its end, so a retracement should happen. The pretty small volume requires it too.
2. the $9500 level is a very strong resistance and it happens to be near wave 5's end.
3. We have a short term bearish divergence on the RSI, and a longer term bearish divergence on the momentum, so we are losing a little bull power.
4. RSI is over 70 on the 2h chart and it nears 70 on the daily chart.
Therefore we have two options: either we'll have an ABC correction soon, resuming the bullish trend after it, or, due to insufficient buy volume, we start a downtrend impulse wave which will push us into the $7000's or even lower. Anyway, supports need to be reconfirmed.
No matter which is the right scenario, I think there will be better prices to buy if you are not already long. Buy on confirmed supports, sell on reconfirmed resistances; this should be a good policy.
That means a bullish trend resume, but however be careful with some aspects. First, we are in a big rising wedge. We've already had 3 bear traps after the first big pump, but this one should be for real because of the following reasons:
1. Wave 5 if it's correctly drawn on my chart is near its end, so a retracement should happen. The pretty small volume requires it too.
2. the $9500 level is a very strong resistance and it happens to be near wave 5's end.
3. We have a short term bearish divergence on the RSI, and a longer term bearish divergence on the momentum, so we are losing a little bull power.
4. RSI is over 70 on the 2h chart and it nears 70 on the daily chart.
Therefore we have two options: either we'll have an ABC correction soon, resuming the bullish trend after it, or, due to insufficient buy volume, we start a downtrend impulse wave which will push us into the $7000's or even lower. Anyway, supports need to be reconfirmed.
No matter which is the right scenario, I think there will be better prices to buy if you are not already long. Buy on confirmed supports, sell on reconfirmed resistances; this should be a good policy.
Note
Classical pump and dump scheme. Whales pumped the price liquidating shorts, then we got rejected at the huge resistance zone $9500-9600 and new longs got liquidated. Now both the support at $9200 and resistance at $9500 need to be retested; if we bounce again from $9200, we might range between the two for a while until the market calms down, cause now we have large volume but no clear direction. Thinks look rather bullish tho, so HODL might be an option for a while.
Note
Wave 5 has ended rejected at $9700, and we have now a downtrend retracement. The support at $9200 was retested, as I predicted, and it didn't hold. Volumes are a higher than at the beginning of wave 5 so if the whales do not choose to push us down again, the odds are bullish after this retrace/correction. After this wave will end, I will come with a new update/chart.Note
Too exciting not to come back again. The big ascending wedge seems to break down as it should do, and we're back in the initial uptrend channel. Normal target would be about $8100, but we have a lot of support levels until there. Let's see how deep we retrace.As a comment, previous rising wedge set bear traps making it seem they would break down, what would any trader expect, and then they were pumped up. This one tried to fool traders making them believe that it's also a bear trap, but set a bull trap instead, then it broke down normally. I've expected it not to be a bear trap the 4th time, but that can also mean that bulls resources are limited for now. The volume is a bit higher than in the last days, but I think more volume is needed in order to become fully bullish. I'm expecting big fluctuations.
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