Bitcoin price is printing a symmetrical triangle
Good morning, traders. Today is the CBOE Bitcoin futures expiration date. Furthermore, price has been printing a symmetrical triangle since September 8th which mimics April's symmetrical triangle that resulted in the short squeeze. Shorts were at an ATH at that time and are currently near it as well. Now, much like then, retail sentiment is very bearish and the expectation is that price must go down. So, must we repeat April? No, we don't have to, but the pattern continues playing out similarly which makes it foolhardy not to pay attention.
The 4H chart shows price finding support on, and then bouncing off of, the bottom of the trading range while printing a possible bullish hammer. My expectation, as I explained last night, is to see price target the top of the trading range at $6450-$6500. If price continues to follow April's pattern, then we would expect to see one more move down toward $6350 before price exits the top of the triangle and, potentially, ignites a short squeeze. However, as I said, that short squeeze doesn't have to happen just because price exits there. The price target upon breach of the upper descending resistance line of the triangle is that descending black resistance line. It is based on the widest part of the triangle. That target is also the horizontal red line that we have had on this chart for a while. The descending dotted blue line denotes the top of what everyone is calling the large descending triangle/falling wedge, but notice that we have had two technical breaks in the last couple of months. This makes me question whether that larger pattern really exists. More often then not, you have one technical break and then the price runs the other way. So, is the real pattern the triangle outlined in black that begins with the June low? OBV is nearing a break through the top of the red descending wedge it has been printing since February which would suggest strong price appreciation upcoming. Looking at OBV since September of 2017, we can see how it has been creating a rounded bottom, as expected in a correction, which it may be nearing the lowest point. Volume precedes price, so if we see OBV rising, then the expectation is that price will be following. The bottom remains speculation until it proves itself to be so, however.
The 1D chart has been printing a rising OBV since August 14th as it nears the apex of its descending wedge, similar to the 4H OBV. We need to see OBV breaking the descending dotted black line before we begin getting too excited. OBV is riding the ascending dotted black support line which makes continued upward movement at the moment potentially somewhat suspect. MACD is riding very close to the signal line, just shy of a bullish cross, and is approaching the descending dotted black resistance line. A breach of this line should suggest upward momentum toward the top of the ascending triangle that has been printing since April.
All this being as it is, we cannot forget that we are in a corrective cycle so there's always strong potential for continued downward movement. As such, we can see that a breakdown of the smaller symmetrical triangle that's been printing since September 17th could produce a target as low as $5940 which is on the ascending support line based off the lows on June 24th, June 29th, and August 14th. Furthermore, the much larger possible bear flag breakdown would see a target of around $5000.
The 4H chart shows price finding support on, and then bouncing off of, the bottom of the trading range while printing a possible bullish hammer. My expectation, as I explained last night, is to see price target the top of the trading range at $6450-$6500. If price continues to follow April's pattern, then we would expect to see one more move down toward $6350 before price exits the top of the triangle and, potentially, ignites a short squeeze. However, as I said, that short squeeze doesn't have to happen just because price exits there. The price target upon breach of the upper descending resistance line of the triangle is that descending black resistance line. It is based on the widest part of the triangle. That target is also the horizontal red line that we have had on this chart for a while. The descending dotted blue line denotes the top of what everyone is calling the large descending triangle/falling wedge, but notice that we have had two technical breaks in the last couple of months. This makes me question whether that larger pattern really exists. More often then not, you have one technical break and then the price runs the other way. So, is the real pattern the triangle outlined in black that begins with the June low? OBV is nearing a break through the top of the red descending wedge it has been printing since February which would suggest strong price appreciation upcoming. Looking at OBV since September of 2017, we can see how it has been creating a rounded bottom, as expected in a correction, which it may be nearing the lowest point. Volume precedes price, so if we see OBV rising, then the expectation is that price will be following. The bottom remains speculation until it proves itself to be so, however.
The 1D chart has been printing a rising OBV since August 14th as it nears the apex of its descending wedge, similar to the 4H OBV. We need to see OBV breaking the descending dotted black line before we begin getting too excited. OBV is riding the ascending dotted black support line which makes continued upward movement at the moment potentially somewhat suspect. MACD is riding very close to the signal line, just shy of a bullish cross, and is approaching the descending dotted black resistance line. A breach of this line should suggest upward momentum toward the top of the ascending triangle that has been printing since April.
All this being as it is, we cannot forget that we are in a corrective cycle so there's always strong potential for continued downward movement. As such, we can see that a breakdown of the smaller symmetrical triangle that's been printing since September 17th could produce a target as low as $5940 which is on the ascending support line based off the lows on June 24th, June 29th, and August 14th. Furthermore, the much larger possible bear flag breakdown would see a target of around $5000.
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