Bitcoin : The Same Rhyme With A Different Tune, Current Plan
Updated
This idea may be a bit confusing at first to beginners but if you follow with me below I will explain to you the combination of ideas I am factoring into this current plan for Bitcoin based on historic price action. Use the price scales on the bottom & top of the chart to zoom out to get a better view.
In August 2020 Bitcoin formed a ugly version of a Head & Shoulders Pattern, inside a very obvious "Trading Range" eventually the Head & Shoulders broke out downwards, then came back inside the pattern "failing" the downwards breakout before starting this massive run up to the $60,000 region.
s3.tradingview.com/snapshots/i/IkFEEWcX.png
I try to think ahead of time when looking at charts, to the potential patterns and important areas traders are looking at buying or selling at, and in this idea im going to go over my basic plan on Bitcoin currently by using August 2020 as a guideline to work and compare with. In this idea I will go over 4 main concepts:
-Head & Shoulders Pattern
-Trading Range (Support & Resistance)
-Wyckoff Reaccumulation
-Head & Shoulders Pattern Failure
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Head & Shoulders Pattern
Click image below then hit the Play Button for further information on this pattern and to see it play out.
In this Pattern price forms 3 distinct peaks after a strong uptrend, the left and right peak should have a similar height (shoulders), the middle peak (head) has to be the highest or this can not be a HS pattern . They should seem triangular in appearance but as long as it fits the main characteristics can still be a valid pattern.
The right shoulder should form a lower high which is a early sign of trend change, this is entry A, with entry B being the bearish retest of of the “neckline” (marked on chart #2). The idea is to gain an early entry on the pattern at point A to maximize profits and reduce risk. Once price moves above the middle "peak" it is likely that the pattern is not valid anymore so this allows us to get a tight stop loss upon entry. We measure the height of the pattern and add it to the breakout level for a maximum possible price target.
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Trading Range:
Below are two examples of Trading Ranges:
A trading range occurs when the price of a financial asset on a Technical Analysis Chart zig zags between consistent high and low prices for a period of time forming a almost rectangular box in which it swings between. The top can provide "resistance", while the bottom of the trading range usually provides "support". We can see the price finally "pierce" outside of the range giving us a probability of price heading in that direction.
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Wyckoff Reaccumulation Range:
Click image below then hit the Play Button for further information on this pattern and to see it play out.
The Wyckoff Method is a study of how market makers and whale manipulate retail traders to get in, and out of large positions. It's something any serious trader MUST understand. You do not want to get caught in distribution, and you don't want miss out on accumulation or re accumulation which is where heavy buying occurs before strong upwards movements.
A Wyckoff Reaccumilation Schematic is basically a study on a advanced chart pattern whales and large size traders use to trick retail traders (mom & pop investors) into "PANIC SELLING" there asset or triggering stop losses under important support areas to generate the massive liquidity needed to fill large buy orders. They trick the traders and fill orders at the Shakeout and Spring areas.
This is very advanced education so I wont go into the full details but to put it simply, price moves between the trading range, eventually it loses the bottom of the range and as panicked investors flock to sell to protect their capital buyers are waiting below and the price quickly comes back inside the Trading Range before moving upwards again, and the wealth has been transferred from the panicked sellers into the hands of the patient buyers underneath the support area (Spring Phase).
So because the Head & Shoulders Pattern is forming a Obvious Trading Range this can lead to a "Sweep" of the lows, underneath the support area for a potential Wyckoff Spring like so in this comparison with August 2020:
s3.tradingview.com/snapshots/z/Z4QCmunn.png
Note how the Price Eventually comes back inside the Trading Range, which leads to the Failure of the Head & Shoulders Pattern as explained in the next section:
---------------------------------------------------------------------------------------------------------------------------------------
Head & Shoulders Pattern Failure
Below image shows Pattern Failure of Above Head & Shoulders Example
General Pattern Failure occurs when a chart pattern breaks out, fails to hit target, quickly reverses then rejects off that same breakout level back inside the pattern continuing in the opposite direction of the breakout.
Another Head & Shoulders Failure on BNB for comparison (Click & Press Play):
<deleted>
In a normal Head & Shoulders Pattern we see the Neckline become Resistance, in the Failure of the pattern this area (which is often can be the Support of a Trading Range also) becomes support as price bounces off it before moving upwards. General pattern failure can also be considered a Liquidity Grab or can be referred to as a “Fake Out” where many sellers pile on quickly anticipating cheaper prices but large buyers are expecting this and wait below quickly buying up the panicked sellers and sending the price upwards inside the Head & Shoulders once again.
So if Bitcoin continues to form the Head & Shoulders we are looking for this as a sign eventually that the Pattern is failing and the buyers are once again in control; note how it also lines up quite well with our potential Wyckoff idea:
---------------------------------------------------------------------------------------------------------------------------------------
Conclusion
Together all of these signs are giving me a clear structure and key areas to watch in the future for points of reference for potential swing trades on Bitcoin, I still continue to hold Bitcoin and following the GREEN and RED circles on my plan I will be looking to protect my capital if we do see the formation of the Head & Shoulders play out just like in 2020, looking to rebuy and start buying Bitcoin again at the Green circled areas depending on what the price looks like if we get down there.
If you click on my ideas below you will see the similar Trading Plans & Ideas to BTC currently. (Click Image, Press Play Button) I posted these in August 2020 which lead to a almost $50,000 increase on Bitcoin, Lets hope that history once repeats itself here...
And Compare with the Current Chart:
Learning to trade patterns such as these can provide great opportunities if you understand price action and how to identify the key areas of the pattern that other traders and investors may be focusing on too, these areas become important psychological levels on the chart. They also provide great benefit in giving you areas to calculate Risk:Reward ratio and find entry points.
If you found the idea insightful you can show you support by liking & commenting thank you!
In August 2020 Bitcoin formed a ugly version of a Head & Shoulders Pattern, inside a very obvious "Trading Range" eventually the Head & Shoulders broke out downwards, then came back inside the pattern "failing" the downwards breakout before starting this massive run up to the $60,000 region.
s3.tradingview.com/snapshots/i/IkFEEWcX.png
I try to think ahead of time when looking at charts, to the potential patterns and important areas traders are looking at buying or selling at, and in this idea im going to go over my basic plan on Bitcoin currently by using August 2020 as a guideline to work and compare with. In this idea I will go over 4 main concepts:
-Head & Shoulders Pattern
-Trading Range (Support & Resistance)
-Wyckoff Reaccumulation
-Head & Shoulders Pattern Failure
---------------------------------------------------------------------------------------------------------------------------------------
Head & Shoulders Pattern
Click image below then hit the Play Button for further information on this pattern and to see it play out.
In this Pattern price forms 3 distinct peaks after a strong uptrend, the left and right peak should have a similar height (shoulders), the middle peak (head) has to be the highest or this can not be a HS pattern . They should seem triangular in appearance but as long as it fits the main characteristics can still be a valid pattern.
The right shoulder should form a lower high which is a early sign of trend change, this is entry A, with entry B being the bearish retest of of the “neckline” (marked on chart #2). The idea is to gain an early entry on the pattern at point A to maximize profits and reduce risk. Once price moves above the middle "peak" it is likely that the pattern is not valid anymore so this allows us to get a tight stop loss upon entry. We measure the height of the pattern and add it to the breakout level for a maximum possible price target.
---------------------------------------------------------------------------------------------------------------------------------------
Trading Range:
Below are two examples of Trading Ranges:
A trading range occurs when the price of a financial asset on a Technical Analysis Chart zig zags between consistent high and low prices for a period of time forming a almost rectangular box in which it swings between. The top can provide "resistance", while the bottom of the trading range usually provides "support". We can see the price finally "pierce" outside of the range giving us a probability of price heading in that direction.
---------------------------------------------------------------------------------------------------------------------------------------
Wyckoff Reaccumulation Range:
Click image below then hit the Play Button for further information on this pattern and to see it play out.
The Wyckoff Method is a study of how market makers and whale manipulate retail traders to get in, and out of large positions. It's something any serious trader MUST understand. You do not want to get caught in distribution, and you don't want miss out on accumulation or re accumulation which is where heavy buying occurs before strong upwards movements.
A Wyckoff Reaccumilation Schematic is basically a study on a advanced chart pattern whales and large size traders use to trick retail traders (mom & pop investors) into "PANIC SELLING" there asset or triggering stop losses under important support areas to generate the massive liquidity needed to fill large buy orders. They trick the traders and fill orders at the Shakeout and Spring areas.
This is very advanced education so I wont go into the full details but to put it simply, price moves between the trading range, eventually it loses the bottom of the range and as panicked investors flock to sell to protect their capital buyers are waiting below and the price quickly comes back inside the Trading Range before moving upwards again, and the wealth has been transferred from the panicked sellers into the hands of the patient buyers underneath the support area (Spring Phase).
So because the Head & Shoulders Pattern is forming a Obvious Trading Range this can lead to a "Sweep" of the lows, underneath the support area for a potential Wyckoff Spring like so in this comparison with August 2020:
s3.tradingview.com/snapshots/z/Z4QCmunn.png
Note how the Price Eventually comes back inside the Trading Range, which leads to the Failure of the Head & Shoulders Pattern as explained in the next section:
---------------------------------------------------------------------------------------------------------------------------------------
Head & Shoulders Pattern Failure
Below image shows Pattern Failure of Above Head & Shoulders Example
General Pattern Failure occurs when a chart pattern breaks out, fails to hit target, quickly reverses then rejects off that same breakout level back inside the pattern continuing in the opposite direction of the breakout.
Another Head & Shoulders Failure on BNB for comparison (Click & Press Play):
<deleted>
In a normal Head & Shoulders Pattern we see the Neckline become Resistance, in the Failure of the pattern this area (which is often can be the Support of a Trading Range also) becomes support as price bounces off it before moving upwards. General pattern failure can also be considered a Liquidity Grab or can be referred to as a “Fake Out” where many sellers pile on quickly anticipating cheaper prices but large buyers are expecting this and wait below quickly buying up the panicked sellers and sending the price upwards inside the Head & Shoulders once again.
So if Bitcoin continues to form the Head & Shoulders we are looking for this as a sign eventually that the Pattern is failing and the buyers are once again in control; note how it also lines up quite well with our potential Wyckoff idea:
---------------------------------------------------------------------------------------------------------------------------------------
Conclusion
Together all of these signs are giving me a clear structure and key areas to watch in the future for points of reference for potential swing trades on Bitcoin, I still continue to hold Bitcoin and following the GREEN and RED circles on my plan I will be looking to protect my capital if we do see the formation of the Head & Shoulders play out just like in 2020, looking to rebuy and start buying Bitcoin again at the Green circled areas depending on what the price looks like if we get down there.
If you click on my ideas below you will see the similar Trading Plans & Ideas to BTC currently. (Click Image, Press Play Button) I posted these in August 2020 which lead to a almost $50,000 increase on Bitcoin, Lets hope that history once repeats itself here...
And Compare with the Current Chart:
Learning to trade patterns such as these can provide great opportunities if you understand price action and how to identify the key areas of the pattern that other traders and investors may be focusing on too, these areas become important psychological levels on the chart. They also provide great benefit in giving you areas to calculate Risk:Reward ratio and find entry points.
If you found the idea insightful you can show you support by liking & commenting thank you!
Note
One missing chart from above Wyckoff Comparison s3.tradingview.com/snapshots/z/Z4QCmunn.png
Note
So far playing out quite well, If we do not reject around the 60-62,000 region then this idea may be invalidated and BTC pushes up to 70,000. Just being patient and seeing how the price develops currently.
Note
So far idea going to plan, Elon just created our right shoulder :)
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