ICP → Internet Computer Running Out of Gas with Ascending Wedge?
Updated
ICP gave us another push up after we broke the Support Zone and established support. Now we see ICP coming down to test the Push #2 high of $11.80. The price is consolidating to the upside in an ascending wedge pattern, should we short?
How do we trade this? 🤔
It is not time to short because we're still in the ascending wedge pattern and have not failed to make new highs and new lows. The earliest we should be entering a trade is when the price attempts to make a new high, fails and has broken out of the wedge.
We're looking for a sell signal (bear bar closing on or near its low with a wick top) followed by a confirmation bar (strong bear bar closing on or near its low). The likely price area to enter the short will be around $13.00, but we're still a ways from the target, so we'll have to watch the candles print to size up our entry. A higher probability of profit trade is a 1:1 short scalp to the Support Zone, making the assumption that this will play out as a pullback rather than a bear run.
We need to keep an eye on Bitcoin as it nears $45,000 again. I suspect it will fail to break the neckline but until we confirm that, we can trade as if it won't.
💡 Trade Idea 💡
Short Entry: $13.00
🟥 Stop Loss: $17.00
✅ Take Profit: $8.98
⚖️ Risk/Reward Ratio: 1:1
🔑 Key Takeaways 🔑
1. Three Pushes Up from Ascending Triangle Breakout
2. Ascending Wedge Forming
3. Look for Double Top Wedge Breakout to Short
4. Watch Bitcoins Possible Reversal from $45,800, Impact on Alt Coin Market.
5. High RSI at 63.00 below Moving Average, Supports Pullback to Support Zone.
💰 Trading Tip 💰
Ascending Wedges signal an increased probability of a bear breakout. Combined with three pushes up in a bull trend and strong sell bars (candles with large wicks on their tops), creates conditions where a counter-trend trade is reasonable.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
How do we trade this? 🤔
It is not time to short because we're still in the ascending wedge pattern and have not failed to make new highs and new lows. The earliest we should be entering a trade is when the price attempts to make a new high, fails and has broken out of the wedge.
We're looking for a sell signal (bear bar closing on or near its low with a wick top) followed by a confirmation bar (strong bear bar closing on or near its low). The likely price area to enter the short will be around $13.00, but we're still a ways from the target, so we'll have to watch the candles print to size up our entry. A higher probability of profit trade is a 1:1 short scalp to the Support Zone, making the assumption that this will play out as a pullback rather than a bear run.
We need to keep an eye on Bitcoin as it nears $45,000 again. I suspect it will fail to break the neckline but until we confirm that, we can trade as if it won't.
💡 Trade Idea 💡
Short Entry: $13.00
🟥 Stop Loss: $17.00
✅ Take Profit: $8.98
⚖️ Risk/Reward Ratio: 1:1
🔑 Key Takeaways 🔑
1. Three Pushes Up from Ascending Triangle Breakout
2. Ascending Wedge Forming
3. Look for Double Top Wedge Breakout to Short
4. Watch Bitcoins Possible Reversal from $45,800, Impact on Alt Coin Market.
5. High RSI at 63.00 below Moving Average, Supports Pullback to Support Zone.
💰 Trading Tip 💰
Ascending Wedges signal an increased probability of a bear breakout. Combined with three pushes up in a bull trend and strong sell bars (candles with large wicks on their tops), creates conditions where a counter-trend trade is reasonable.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
Note
As expected, ICP gave us another push up in an attempt to break the $15.00 price area but only to fail again. We have a large bull bar appearing after three pushes up in a bull trend and failing to make a higher high. This is a signal that makes a reversal more probable. What we need to justify a short is another slow attempt and failure to break $14.00. Once we get strong bear close in response to that price area, a short entry is justified. Set a profit target for somewhere before the Support Zone which is at $8.23. I would use a 1:1 Risk/Reward Ratio because your stop loss should be placed above the trend high of $16.30.
Note
ICP delivered the sell signal we were looking for! The Daily close on January 14th was the perfect sell bar and reasonable to short just below at $12.50. The price has now fallen to the Daily 30EMA around $11.40, we need a bear candle close below the ribbon to confirm the trend change.
If you're in this short, hold that position as there are no signals indicating our premises have been invalidated.
Note
ICP closed a hanging Daily bear candle below the 30EMA! This is a good sign for the short position. If we get another bar or two closing below the 30EMA, the take profit target becomes far more probable.
Note
ICP made it down to $9.54 before coming back up to the Daily 30EMA! A second bear sell signal just closed yesterday on the Daily chart, signaling we may have another push down. I suspect the price action will come up a bit before before a fall and that could stop you out if you're in this trade. However, I don't see any price action that says it's time to run just yet.
Note
It is now reasonable to end a the short position as I believe the market will make another move up before coming back down. If you took profits below the Daily 30EMA, congratulations! If you have been in a short since $13 without taking profits, you're barely into the profits now and I would suggest getting out of the position.My latest analysis is about to drop justifying a long scalp!
-Joe Dean
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