BTC: The Same Pattern is Going to Play out?

Looking at this chart you could admit that there are two structures that are very similar.

Let's look at the first one: Downward Channel 1. We broke out of this channel in a violent manner within two daily candles and got stuck in a range around 0.618 Fib, forming a Bull Flag. Notice that we had a wick out of the flag. Eventually the Flag broke out and reached its full target at 8650, just where the second Downward Channel starts. Another interesting part here is that we perfectly reached 1.618 Fib extension from the beginning of the Downward Channel 1.

Looks like now we have the same formation: Downward Channel 2 + violent breakout within 2 daily candles, reaching 0.618 Fib, establishing a Bull Flag + a wick out of the flag. So, if we follow the pattern, we will break out of the Bull Flag and meet its full target at the same level of 8660 and we can even overshoot it like the previous time and reach 1.618 Fib extension, which is sitting at 9060.

But what should bother you is that there is ridiculous amount of similarities between these two formations and the overwhelming amount of longs: ~ 60% on BitMEX. That does not favour the bulls.

Tell us in the comment what you think about this!



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The information given is never financial advice. Always do your own research.

Komen:

The Bull Flag broke out to the downside.

My concerns about the excessive amount of Longs got justified. There were too much longs (60% on Bitmex) to complete the pattern.