The price patterns for many trading instruments tend to alternate between impulsive and corrective moves. Chris Capre wrote a great, free article on impulsive and corrective action that you can find here where he makes two key assertions about the relationship between both price patterns:
- Impulsive moves about 75% of the time are followed by corrective moves. These corrective moves can either be horizontal, slightly against the impulsive move, or even slightly in the same direction, but they denote a change in the order flow and participation.
- 75% of the time, these corrective moves are followed by impulsive moves in the same direction as the original impulsive move.
Price action, therefore, generally alternates between impulsive and corrective behavior.
Ethos (listed under BQX on Binance) is displaying the type of impulsive/corrective price action noted above and may be transitioning into another impulsive move over the next several weeks:
Focusing on the consolidation structure in phase 3 – notice the potential change in price structure. Prices have been making a succession of lower highs and lower lows (note cycles 1-4 below). However, cycle 5 did not bring another expected lower low if prices hold. Rather, price found support at the level where it previously met resistance during the Phase 1 consolidation. Since support generally becomes resistance upon a breach (and vice versa) it makes sense that price would find traction here.
Buying in on a pullback towards 30000 Satoshi with a stop below the Role Reveral Level @ 21500 Satoshi and a target near the alltime highs at 65000 Satoshi would yield a reward:risk ratio of about 4:1 (reward: ~35000 Satoshi, risk: ~8500 Satoshi).
There are also several fundamental drivers that may actuate price appreciation over the next several weeks:
NOTE: the data in this article is based off the data for BQX/BTC provided to TradingView from Binance
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