That's what it looks like to me as well. I think we may be in for a drop on BTC to 8 or 9K... I am a long-term holder so it's no big deal, but a little disturbing...
nadineb
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@sdwariz, thank you for your comment. I also feel like we're going to complete the H&S and breakout downwards. What else can I base that downward prediction on (if anything) other than the H&S? Are you using fib to base your 8-9k target?
sdwariz
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@nadineb, I am using the neckline of the H&S as a guide. I always use the wicks as my connecting points, and in this case connecting the lower wicks makes for a fairly steeply downward-sloping neckline. If the downward price trend continues, it will cross the neckline around 10,000 or so. I can see the price dropping 10-20% below that. Disturbing, to be sure, for many people, but it would represent a correction from the ATH of a "mere" 60% roughly, and Bitcoin has made worse corrections in the past. If it did correct that much, it would still be over quadruple the price it was at the low point in July of this year, and up some 800% from the beginning of the year.
As you mentioned, the price has broken downwards out of the rising wedge, and that would make it more likely, in my opinion, to continue downward and complete the H&S formation.
sdwariz
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@nadineb, the 8-9K target is based on previous low points that may act as support levels (9K support based on 11/30 price and approx. 7900 level reached multiple times between 11/19 and 11/23).
sdwariz
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@nadineb, there is also a pennant formation that should be interesting to see if we break downwards through it; see:
nadineb
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@sdwariz, Yes, I see that pennant as well! I also put a downward channel on the last trend. It broke below the trendline, kind of went sideways for a little back inside the channel... now it broke above the trendline. Does it really mean anything if it breaks through the channel trendline? It also looks like the R shoulder might be becoming the L shoulder of a new H&S pattern.
sdwariz
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@nadineb, it's not good...what we've got now is a flag pattern. because the original movement starting 12/27 was sharply down, and the flag is sloping up, this is a bearish continuation signal and the prediction is that soon the price will move sharply downward again. The interesting thing is that we have essentially the same pattern that formed over the period 12/23 to 12/25, but instead of the price breaking downward at that time, it broke to the upside. This goes to show that you never know for sure what the markets will do. However, as I mentioned, based on this current flag pattern, the price should break and go sharply downward, and I would expect this to happen at any time.
Another note: If you zoom out a little and take the whole period starting from the high point on 12/17, what you have is another, larger flag scenario! Again, this is a bearish signal. I will do a chart on it so that you can see what I mean, and post a link back to it here.
@sdwariz, Thank you for posting that, I don't know much about the flag patterns yet, I would've never seen that! It looks like we're heading upwards to retest the trendline...
sdwariz
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@nadineb, Yeah, only trouble is, when you're approaching a line from underneath, it can become a line of resistance....we can now draw a trendline going further back (connecting the lows on 11/17 and 11/23), and it looks like we have another support point around 10,900.