Bull's Exhausted? Head and Shoulders appear.
Updated
The Head and Shoulders pattern is typically a bearish sign of a trend reversal. We see one having appeared here and at the moment we are just at the neckline. If the neckline is broken we may see a continued trend reversal. But we have also seen this pattern reverse and lead into another bull run. What I am most uncertain about in this analysis is the volume. As we can see, the volume of the Right shoulder (his right) is pretty massive. On Binance that shoulder reached about 480 Sats before reality set in. The head and left shoulder are showing diminishing volume. Maybe someone with more expertise can chime in and let us know if this is a signal that the H and S pattern is valid or invalid.
I'm learning all of this as I go so don't take my analysis too seriously!
Good luck.
I'm learning all of this as I go so don't take my analysis too seriously!
Good luck.
Note
Just did a little bit of research. Apparently the volume we see here is consistent with the Head and Shoulders trend reversal pattern. For a legitimate H and S we can expect to see a previous upward trend (or else there's nothing to "reverse") which leads into the left shoulder.The first shoulder (the left) of this pattern is accompanied by the largest spike in volume. What's important to note and look for is if there is a large red volume candle following the apex of the first shoulder. This is a sign of large sell-offs and could indicate what's coming. Remain cautious if you recognize this and don't get greedy.
The head is the second wave of this bull-run. The volume should be diminished if it's a H and S. This is the Bull's gathering their strength and are charging in hoping to overwhelm the bears. But the volume is no longer there. So they may hit a new ATH but there are many other traders standing by with large sell orders and are paying close attention to RSI, Momentum, and their Volume Oscillator. When RSI becomes overbought and Momentum starts to shift we see the second big dump.
The last shoulder sort of appears to be a phase of denial. Some poor schmuck's may have bought in at the high on the first shoulders. They don't see the pattern and they're hoping the upward trend continues. During the Right shoulder, most of the whales, day traders, and smart money have made their profit. They see what's happening and may have been expecting it after seeing the first two waves. The final big orders are closed. No one is frantically buying anymore. And the volume dries up.
In the case of XVG we may just chill out at the 250 Satoshi level for a while. I'm not sure. There is a rather large wall supporting the price at 250 Satoshi of about 25 BTC on Binance. If that wall comes down, I'd expect to see the downtrend continue.
For the time being, the charts are moving laterally. Pretty much where they picked up from last night. If you're still in it, it looks like at least some person (people?) believe that a new entry price of 250 Satoshi is juuuust right. So if you're just arriving, it may be a good idea to join those individuals and set a buy order.
I'd also set Stop-Losses at 5-10% below that depending on your risk tolerance.
Keep your eyes peeled for the famous *Inverse* Head and Shoulders pattern. For some fresh bag hodler's, seeing that could bring some relief.
Note
Neckline never broken.It's trading sideways and consolidating. Buy in the "dips" at about 260 - 280 and prepare for another push upward when you see the chart form an even more narrowing wedge. Probably to the point that Bollinger Bands start to become useful.
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