Good day Hiveians!
Join me in analyzing the crypto markets!
Now that we are experiencing some correction, it's time to look at possible short term bearish scenarios for bitcoin. Corrections of 30-40% have always happened in the past, so this is to be expected. The problem is that we woud be only half way there, so it could make sense to go short on some positions. However, if you don't want to deal with the stress of short term trading, I would suggest to hodl :)
After going over the charts for quite a while I found a possible pattern from 2017 that could repeat itself. Let me show you what I mean... This is the current daily chart. The ovals mark the points in time which I think could be sharing strong similarities. The first oval could therefore quite likely be a good predictor for the second one.
Notice how extremely bullish the last weeks have been! Almost only green bars... There simply has to be a bigger correction... possibly just like in the first oval. While I thought this would occur at even higher prices it looks like it is currently already happening.
Now let's have a more detailed look because the similarities are remarkable! This is the pattern from 2017. I have marked the revealing characteristics of that pattern with numbers from 1-6.
Compare this fractal to the current one. We almost have a perfect match! I have extrapolated the movement from the first one to the second one using fibbonaci ratios, which is shown as the black line (it's fairly accurate).
Obviously patterns never repeat in the exact same way. So this should be taken with a grain of salt. But the fibonacci ratios match the existing trend lines quite well which gives me some confidence in the accuracy of this possible scenario. There is one big difference that separates these patterns in chart 2 and 3. The orange trend line in chart 3 was much lower in chart 2. This has the potential to change the pattern quite a lot. For example, the current support at 46k could hold, meaning that a further slide to 33k could be averted. However, this orange trend line (see in chart 1) is much weaker than in 2017 (it is only supported by two peaks rather than 5). So I'm not sure if it's so relevant.
What is the take away?
For me personally I will be taking profits if btc reaches ~53k in the short term as the bear scenario is quite likely in my opinion. Look at the first chart again: A bull run to 60k, 70k etc. is possible, but the past has shown that this momentum simply cannot be maintained for months...
The blue middle trend line is crucial: if this line is "broken" it makes the bear scenario a lot more likely. But for now we should be riding the "B" wave to 53k once a possible low of ~41k is reached in the coming days.
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
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