Inverted H&S pattern inside a larger inverted H&S
Updated
In order for this pattern to be valid we would need to see a high volume, very violent move up towards $4,300 in the coming days or week.
Once $4,300+ is breached, we would need a retrace to around the .618 of the swing high located around $3,580. Worst case scenario, the .786 at around $3,320.
If the .618 or the .786 hold, we would need to see a high volume break of the neckline at $4,300.
Target for this pattern validation is $5,500.
Invalidation would be a break below 3k.
There are multiple different ways to trade this pattern. You can take a more aggressive high reward play, and long support from $3,120-$3,190 with take profit set at the neckline.
You can also wait for confirmation of a neckline test at $4,300 then short with a target of the .618 located around $3,600.
For the highest winning probability trade, wait until a test of the neckline and subsequent retrace for the right shoulder. If support holds, long there with take profits set at $4,300 and $5,500.
If one were to long right now for the aggressive play, the R/R on this setup alone is 4.66.
Bullish divergence has been building for many days in a row now, while we keep dropping in price. Although we have substantially dropped in price the past week, the RSI refuses to create a lower low in anything past the 2h.
What we are seeing now in the 4h and 6h are very very strong divergences.
Today, there was a sharp increase in longs on BFX.
The daily is forming a doji, turning possibly into a bullish hammer. The body of the candle is very small, and this indicates potential bearish exhaustion.
We made it to only $120 off of the 3k barrier people keep screaming will hold.
It is also known throughout Crypto that Bitmex is now beginning to liquidate customers that are logging in from US IP addresses this week.
One thing I've learned about this space is that when Bitmex does something, it is very calculated. If this is a potential IHS pattern, it would make sense. Let US customers short to make your workload easier, but don't allow them to long because while longing your asset appreciates in value.
Just something to think about.
Support can be found at $3,120.
I am now starting to believe that with all the chances we have had to break 3k, it may hold after all. My long term thoughts are that Bitcoin will dip below $1,500 or worse for the FINAL bottom, but this may not be it quite yet.
I am very very bearish, and I believe this may be a trick in the charts. Until I see a retest of $4,300 I believe we will break 3k support.
Past that support we're looking at $2,500.
I will come out with a new idea update once we see some upward momentum.
Once $4,300+ is breached, we would need a retrace to around the .618 of the swing high located around $3,580. Worst case scenario, the .786 at around $3,320.
If the .618 or the .786 hold, we would need to see a high volume break of the neckline at $4,300.
Target for this pattern validation is $5,500.
Invalidation would be a break below 3k.
There are multiple different ways to trade this pattern. You can take a more aggressive high reward play, and long support from $3,120-$3,190 with take profit set at the neckline.
You can also wait for confirmation of a neckline test at $4,300 then short with a target of the .618 located around $3,600.
For the highest winning probability trade, wait until a test of the neckline and subsequent retrace for the right shoulder. If support holds, long there with take profits set at $4,300 and $5,500.
If one were to long right now for the aggressive play, the R/R on this setup alone is 4.66.
Bullish divergence has been building for many days in a row now, while we keep dropping in price. Although we have substantially dropped in price the past week, the RSI refuses to create a lower low in anything past the 2h.
What we are seeing now in the 4h and 6h are very very strong divergences.
Today, there was a sharp increase in longs on BFX.
The daily is forming a doji, turning possibly into a bullish hammer. The body of the candle is very small, and this indicates potential bearish exhaustion.
We made it to only $120 off of the 3k barrier people keep screaming will hold.
It is also known throughout Crypto that Bitmex is now beginning to liquidate customers that are logging in from US IP addresses this week.
One thing I've learned about this space is that when Bitmex does something, it is very calculated. If this is a potential IHS pattern, it would make sense. Let US customers short to make your workload easier, but don't allow them to long because while longing your asset appreciates in value.
Just something to think about.
Support can be found at $3,120.
I am now starting to believe that with all the chances we have had to break 3k, it may hold after all. My long term thoughts are that Bitcoin will dip below $1,500 or worse for the FINAL bottom, but this may not be it quite yet.
I am very very bearish, and I believe this may be a trick in the charts. Until I see a retest of $4,300 I believe we will break 3k support.
Past that support we're looking at $2,500.
I will come out with a new idea update once we see some upward momentum.
Note
Hidden bearish divergence forming in the 4h.
It can be invalidated with a close above $3,230.
If not...3k or less here we come.
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