Bear/Bull Case for Bitcoin
This idea considers both bear and bull cases. It also makes use of Elliot Waves (3-3-3-3-3 symmetric triangle wave structure), classical triangle pattern (typically a continuation type of pattern), and double top pattern.
Bear Case: A potential double top may be forming (the two peaks are within about 4% of each other). Have a look at the rounded red curves to see the peaks. If this formation holds true, then the conservative downward target is the 7500 support area. Short only on the confirmed break below wave A. An aggressive target is the height of the tallest mountain (13850 - 9700 = 4150) subtracted from the valley of the double top pattern (9700), which gives us (9700 - 4150 = 5550). An extremely aggressive target takes us all the way down to the break out signal on April 2nd, 2019, which is about 4200.
Bull Case: A potential 3-3-3-3-3 Elliot Wave symmetric triangle structure is happening. We just reached the 1.618 extension of the ii subwave to hit wave C. This means we still need to form waves D and E to complete before the market makes a final decision to move higher. Triangles generally have 5 waves. This structure would be expected to complete near the end of July 2019. If true, a conservative target is the height of the triangle (13850 - 9700 = 4150) added to the break out point of the triangle (about 12000 near the end of July 2019), which gives us a target of (12000 + 4150 = 16150).
An aggressive target is to consider this triangle as a flag/pennant and pole pattern. For the pole/mast, take the height of the entire bull move from the major break out on April 2nd, 2019 (4200) to the top of the pennant on June 26th, 2019 (13850), which gives us (13850 - 4200 = 9650). Add this value to the break out of the pennant/triangle (about 12000 near the end of July 2019), which gives us a target of (12000 + 9650 = 21650). This is pretty much a retest of all-time highs, which is logical in terms of market movements. How will this happen? Probably another parabolic move like the one we saw at the end of 2017, which was caused by out-of-control buying and shorts being burned. Altcoins may begin to participate in such bullish parabolic moves. RSI could be reasonably expected to exceed 90 on the daily time frame if this scenario happens.
Look at the volume. It has declined for the last 3 weeks. This is a special characteristic of triangle formations. Also, RSI is at neutral (about 50) on the daily time frame. My personal opinion leans on the conservative bull case stated above.
Note: In general, pennants span 4 weeks or less. Triangles have a longer duration. However, these definitions could be treated loosely as you can spot these classical patterns in shorter time frames. It's just a guideline.
***Did any of these ideas resonate with you? Leave a comment below to add to the discussion. Are you a bull or bear in this current situation? Explain.***
Bear Case: A potential double top may be forming (the two peaks are within about 4% of each other). Have a look at the rounded red curves to see the peaks. If this formation holds true, then the conservative downward target is the 7500 support area. Short only on the confirmed break below wave A. An aggressive target is the height of the tallest mountain (13850 - 9700 = 4150) subtracted from the valley of the double top pattern (9700), which gives us (9700 - 4150 = 5550). An extremely aggressive target takes us all the way down to the break out signal on April 2nd, 2019, which is about 4200.
Bull Case: A potential 3-3-3-3-3 Elliot Wave symmetric triangle structure is happening. We just reached the 1.618 extension of the ii subwave to hit wave C. This means we still need to form waves D and E to complete before the market makes a final decision to move higher. Triangles generally have 5 waves. This structure would be expected to complete near the end of July 2019. If true, a conservative target is the height of the triangle (13850 - 9700 = 4150) added to the break out point of the triangle (about 12000 near the end of July 2019), which gives us a target of (12000 + 4150 = 16150).
An aggressive target is to consider this triangle as a flag/pennant and pole pattern. For the pole/mast, take the height of the entire bull move from the major break out on April 2nd, 2019 (4200) to the top of the pennant on June 26th, 2019 (13850), which gives us (13850 - 4200 = 9650). Add this value to the break out of the pennant/triangle (about 12000 near the end of July 2019), which gives us a target of (12000 + 9650 = 21650). This is pretty much a retest of all-time highs, which is logical in terms of market movements. How will this happen? Probably another parabolic move like the one we saw at the end of 2017, which was caused by out-of-control buying and shorts being burned. Altcoins may begin to participate in such bullish parabolic moves. RSI could be reasonably expected to exceed 90 on the daily time frame if this scenario happens.
Look at the volume. It has declined for the last 3 weeks. This is a special characteristic of triangle formations. Also, RSI is at neutral (about 50) on the daily time frame. My personal opinion leans on the conservative bull case stated above.
Note: In general, pennants span 4 weeks or less. Triangles have a longer duration. However, these definitions could be treated loosely as you can spot these classical patterns in shorter time frames. It's just a guideline.
***Did any of these ideas resonate with you? Leave a comment below to add to the discussion. Are you a bull or bear in this current situation? Explain.***
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