The New Pennant! Bitcoin isn't done fighting yet...

4 Apr 2018

Based on my last pennant, whose bottom line is the dashed transparent black line, we began shorting at 7660. As of now, that lands us a healthy 11.6% profit; not bad! I would close some of it in a take profit move, as right now I have two possible scenarios for bitcoin. Conveniently, I was doing some good old zooming out to try and find a new market direction and boom - pennant number two has shown up! The drop out of the last pennant reversed around 6380, thus creating a new logarithmic baseline, which I will use the same overhead resistance for. Now for the analysis. If you look at the last pennant, you see an initial massive bounce that pokes the top of the channel, followed by a smaller bump that still made it all the way to the top, finally followed by a failed tiny bump that didn't manage to make the top. After that bump, it struggled in the bottom of the pennant before falling heavily to 6380. Now in this new pennant, we see the same first giant bump, followed by the second completed bump. The question now is whether we will see a successful drive back to the top of the channel or whether we have a fractal on our hands and we will see another failed bump followed by a drop out of the channel. A long entry now, taking advantage of the correction on the swing up could be prudent, with a stop at 6380 (signaling a pennant drop) and an exit at 8900; 7.5% risk versus 29.5% reward. Happy trading and please don't forget to drop a like or a comment!