Bitcoin: towards a deeper correction?

In this technical analysis, I would like to return for a moment to a recurring market pattern. Indeed, many patterns are repeated over and over again, giving the opportunistic trader occasions to place himself in the market.

After a long consolidation range, BTC breaks his low point and makes a pullback.

Many posts on social networks reported a triangle and, given the broad upward consensus on crypto-currencies, a probable break from the top. The apparent reason why some traders, only busy looking at the chartist recognition of the market, bought this triangle bottom, getting caught in the wrong direction.

I think it is more appropriate to refer to the different patterns (linked to cycles) that the market gives us, which are ultimately more important than the structure of the moment.

If you still want to draw this famous triangle, I advise you to look at the top of the latest bubble from Bitcoin, the one from the end of 2017. The market had broken this same triangle and had thus achieved a good performance by breaking all the successive supports for a year.

The structure is really comparable to the one at the beginning of 2018: same amplitudes, waves…

The problem is that for me this structure is wrong: we were not in a triangle (the triangle is there but I don’t think it was the structure to trade) but in a range!

This leads many traders to take losses because they focus not on a pattern linked to a market cycle, but on a classical chartist pattern, namely a triangle.

Anyway, the consensus is starting to understand that we are no longer bubble and trend traders are also starting to think that short sells were (probably) the best solution.

Anticipatory traders, on the other hand, have therefore sold short the top of the range and are now in the reinforcement phases.

Obviously, we reinvest a part of our gains for our reinforcements: even if the market invalidates us and goes up to the top of the range, we will not take losses but will give up a big profit (we can’t have everything!).

The trend channel, which will stay valid for a long time in my opinion (at least upwards), could be drawn as follows:

The graphic objectives remain the same: filling the gap on the future for a first objective and possibly keeping a small part of the short positions to target the support, which will be a maximum objective.

I do think that over the next few weeks, prices will slowly drop and oscillate between the $9,000 (top of the gap) and $7,200 (big support) zones as can be seen on the volume:

Your targets (in the order book) should always be slightly above the volume peaks or graphic areas you have previously identified so that you are almost certain to be executed and not miss a nice profit because the market almost reaches your order!

Finally, a final word for the buyers. I see a lot of messages circulating asking for purchase timings, is it the right time to enter on BTC or another cryptocurrency… we just broke a range from the bottom, indicating a potential reversal structure and this leads me to think that the purchase areas are below current prices.

Let the short-sellers have a little fun (it’s our turn) and you will get back later and at a lower price. Patience often pays off in trading.

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