From the chart above you can see……wait…… doesn’t it look identical to the last TA? Yes, indeed. Nothing much has changed except I have added the resistance levels to the chart. You can see the AB=CD has worked out perfectly. My bounce target of $7101 was only out by 60 points.
AB=CD is a very powerful pattern in which I only see a few Crypto traders use it. So, how does AB=CD work? As a general rule of thumb: 1. AB should be equal to CD in terms of both price and time 2. Point C cannot exceed point A 3. Point D must exceed point B 4. Point C usually retraces 0.618 – 0.786 of AB 5. Point D should reach 1.272 – 1.618 fib extension of AB 6. Buy/sell at point D depending on whether it’s a bullish/bearish AB=CD pattern
Some materials also suggested that: 1. CD leg is usually wider than the AB leg (takes longer) 2. Point C can retrace less than 0.618 of AB, as long as point C retraces 0.382 of AB 3. Leg AB should be an impulse move 4. AB=CD pattern works out better with point A being the lowest or the highest point of the current trend/direction (In this case, I chose $9990 as point A)
There might be other variations to the rules but personally above are the rules that I would stick to.
I can see many traders are now calling a drop to 4k, 3k, or even 1k, in which I have found it fascinating. Back in March when I said BTC was going to 4.4k, many said it’s impossible. Yes, I got the date wrong, and I have explained the reason is because of the Fib Time Zone. And I have kept reminding you that 4k is certainly still a possibility because of BTC is still in a downtrend/curve channel as well as fractals and the possible butterfly formation. Now, all of a sudden, many of them changed their ideas because the price starts to drop. Do you realise that in order for the price to drop to below 3k, it probably means that (there is a major news that cause the market to crash completely) the market will not recover for at least another 12 months? You should ask yourself these questions – “will I be willing to invest in BTC at 3k while I could make 50%+ profits from the stock market, which is a much less risky alternative, during the 12 months?” “If it does drop to 3k, would I stick to my original strategy and position my trade at 3k, or would I be scared and wait for it to drop to 1k?”
Currently, BTC is still inside the curve channel. There is no clear direction until a higher high or a lower low is made. If you would like to swing trade at the current price level, the risk/reward ratio works out better with buying. One thing that I have learned from a top trader, simple yet powerful, is to buy low and sell high. If you are selling at the current price, you are selling at the low or at the support. Why not wait for BTC to pullback to the resistance level of 7.9k, 8.4k or 8.9k and see if there is any bearish price action before you short? Also, if you have seen my yesterday’s updated idea about the Bart pattern, you would have known that the manipulation is happening again. Do you really want to swing trade the Bart pattern? If you do, where is your SL and TP? And is the risk/reward ratio good enough for you to take the risk?
On the other hand, if you would like to go long, you can position trade and ladder your buy-ins on the way down. Trust me, you will never catch the exact bottom. If you think BTC is going to reverse at 6k, then use 25-35% of your capitals and buy at 6k. And if it does drop below 6k, you can buy more on the way down. I am sorry if you find this as a stupid idea from a trader perspective but with the current price action I just don’t think swing trade Cryptos is a wise move.
To conclude, if you don’t believe in Cryptos in the long term, I think you better just go and invest in stocks instead. Or if you want to swing trade, you better go and swing trade Forex and commodities. They are less manipulative and easier to trade.
Taiwan Bear
Komen
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I think I have accidentally moved point C of the ABCD pattern to the next candle. Anyhow, you get the point.
Komen
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The amount of Shorts have increased while the longs have decreased. Look like so many people would risk their money to trade the Bart pattern. As I have mentioned in my TA above, please do not short until BTC reaches at least 7.9k (I don't think 7.9k is a strong resistance), 8.1k, 8.4k or best scenario 8.9k.
Komen
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POC & 0.382 retrace are both at around $8160.
As well, 2618 pattern suggests that BTC might go to 8.9k, which is also the very important price structure.
Komen
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BTC seems to be holding at the bottom of the rising wedge.
If you have noticed I haven't been drawing the rising wedge on my recent 2x TAs. It's not because I didn't notice the rising wedge but because I don't think the rising wedge would work while the Bart pattern is in play.
As you can see in the chart below, the first breakout of the rising wedge was a fake breakout and many SL got hit. Thereafter BTC formed a bigger rising wedge. Technically speaking you would expect a breakout of the rising wedge to the downside but with the current manipulation I don't think anyone can be sure where BTC would go.
Personally, I would take 30% of profits now and set the SL of another 50% positions @ $7120. And I would keep the remaining 20% positions for long term hold. If you have entered your positions at different prices other than $7101, please make your own decisions and set your SL accordingly.
Komen
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Good morning everybody! Nice to wake up to this pump.
BTC has now broken above the downtrend line and has found support around $7580 - $7600. I still expect BTC to go up to at least 7.9k.
Hopefully you didn't short in the last couple of days.
Komen
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2618 pattern has formed on the 1hr chart.
BTC is now bouncing between $7540 and $7680. It might have a big movement if BTC closes outside of the range.
For those who don't know what 2618 is, I will try to make a education post either today or tomorrow when I have time. Sorry I have been really busy these few days.
Komen
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Guys, there is a "possible" bat pattern formation. Watch the price action around $7124 IF BTC gets there.
Komen
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Yesterday, just before I went to bed, I placed a buy order @ $7124 and SL at 7024. My SL was hit with small loss. Normally what I would do is to zoom in to the 5mins chart and see the price action when it comes to my buy or sell levels. However, as the r/r ratio was good (1:2.5 & 1:4) and I had to go to sleep, I couldn't resist but placed my buy order. Unfortunately I got stopped out with small loss. If you look at the chart below, the big red candle broken down the structure of $7124 and retested it as resistance, which indicated a continuation of downtrend.
This morning (Australia time), I positioned myself with more "long term" positions using the profits I made previously (It's a free ride). You can see from the chart below that BTC did find support level @ $6651 in which I have labelled them in the original chart.
Komen
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Please keep in mind, BTC still has the possibility to go down to 5k or below. The possible Butterfly pattern is still in play. Unless you are an experienced trader, I would not recommend you to swing trade Cryptos. It's definitely more profitable to swing trade Forex and Commodities.
My main strategy currently is to position myself with more long term positions on Cryptos on the way down and focus swing trade on Forex. My next point to add more positions on BTC are between $4800 - $5000.
Another thing I have noticed is the Fib Time Zone. If the Fib Time Zone plays out, the reversal point might be around the 4th July.
I don't know why this author doesn't get enough likes, he deserves it.
Antoniom111
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@lvg3g, totally agree
Jessica_H
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Personally I don't believe Elliot Wave works I'm sorry to say. No successfully professional trader uses Elliot Wave. If you change your lines and predictions using the whole alphabet enough you will occasionally get a hit. The only reason people are deceived into thinking Elliot Waves works is because of FIB and swing High and Swing Lows which have ZERO connection to Elliot Wave.
The reason the price bounced at the 7K level had ZERO do with Elliot wave and everything to do with a larger triangle formation with a bottom trend line finding support. Everyone who understands this saw that pattern which wasn't hard and was ready for the bounce.
Now we are heading for a triple bottom test. In financial markets triple bottoms never end well, so you have been warned. I don't think 7K will hold, nor will anything in the $6's and eventually $5's. The 4K ranges have not been tested as of yet. So anything is possible there. If we don't get a reversal in the 4K ranges then the 3K's will be the last stand. If 3K's fail we will get absolutely capitulation into the $1-1.3K range. If BTC fails there it is all over I'm afraid and BTC will go to ZERO. I don't see that extreme scenario happening. But I am certain this year we will see those 4K ranges be tested and it is happening much faster than I thought.
The more complex and constantly changing your predications on a short to medium term basis as a TA the worse you will do in any market. The simplest market structures are the ones that often work and rarely change. This is what the best traders in the world use. You can read their stories, it's not smoke and mirrors their wealth is very transparent.
But still I find Elliot Wave amusing and how it goes wrong all the time only to be modified and some excuses made up.
1. I am not sure why you brought up the EW. And I did see an EW trader who predicted BTC crash at 20k and the drop to 6k, when BTC was at around 5k last year. Most traders can't use the EW properly because the first thing that a lot of new traders learn is EW. But just because they couldn't get it right doesn't mean that EW has no use.
2. The AB=CD harmonic patterns works perfectly in Forex, Commodities, as well as stocks. So, not sure what your point was.
3. Sure, everyone was ready for the bounce. I see most people talked about 6.6k, 6.8k, 6.9k or even 7k (which was close than my prediction but was unable to make profits because the order was not filled). That makes a huge difference.
4. As I said, there is certainly the possibility of BTC dropping to 4k. I was one of the first people who said that. Again, not sure what was your point?
5. I just said in my TA, I didn't keep changing my predictions, so I don't know what drugs you are taking. Please read the TA carefully before you make a comment.
Epsos
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@Jessica_H, the Tether scam will make BTC drop 80% when it will be revealed. Only after we can make a healthy recovering to new heights.
Krauser
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Thanks for the TA! Learning a lot by following, first TV author I followed ;)
When do you know an ABCD pattern will occur? After reaching a top for the bearish and after a bottom for a bullish one?
An ABCD pattern should be quite obvious to identify (zigzag). After you identify the C point, you can plot the CD leg by copying (clone) the AB leg.
Then you measure the fib extension of the AB leg. D point can occur anywhere between 1.272 - 1.618 fib extension of AB. However, if the CD leg and the 1.618 fib extension of the AB leg happens to meet at the same price level, then that will be a very good price to enter your positions.
You will also need to look at the candles/price actions at the possible reversal point, such as an inside bar or double bottom on the lower time frame to enter.
Let me know if this doesn't make sense.
Cheers
Krauser
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@Taiwan_Bear, Thanks a lot for those explanations, I will study that more before using it ;)
legofish123
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Why can't I like 100000000 times?
Taiwan_Bear
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@legofish123, Because my wife will kill you if you like me too much lol......