Bitcoin and the Triangle of Death
Updated
This is just one of several possible long-term scenarios for BTC.
I'm not implying it will definitely play out like this, but it is a possibility we should keep an eye on.
So if this plays out, we should go down to around 7,1k (point D), then move up to around 8,9k (point E), and then continue down again to the downside of the triangle, and from there drop down really hard.
A symmetrical triangle can also break to the upside, but if it plays out like drawn on my chart, the probability of a breakdown will be much higher. If we do break down, we will see some vicious selling, that could get ugly really fast.
From an Elliott wave perspective, the triangle would form a large wave B in an ABC correction, with the 5-wave-structure before it being wave A.
One problem I see is that wave 4 (of A) is overlapping wave 1, which is not allowed in Elliott wave theory. However, the end of wave 1 was just a large wick, so if we can ignore it or not, is debatable.
So what am I gonna do?
First of all, I will wait if this triangle continues to play out like on my chart, or not.
If it does, then I will watch if we turn around when we reach point E. If we do, I will sell all my BTC (and probably all of my alts, too).
In addition, if we break down from the triangle, I will short the hell out of our good ol' friend Bitcoin.
What could be the downside targets?
1.) If wave C would have the same length as wave A (which is typical), that would bring us to under -4,000$. Yes, minus... so that is not a very likely target :)
2.) If we assume an 0.618 extension instead, that would bring us to the 400-500$ range.
3.) If we forget about Elliott, and just use the standard method of determining a target for a triangle, that would bring us to around 2,000$.
I still have my doubts if this triangle will play out, but as I said, we need to keep an eye on it.
A sustained break above the upper side of the triangle would invalidate this analysis.
I'm not implying it will definitely play out like this, but it is a possibility we should keep an eye on.
So if this plays out, we should go down to around 7,1k (point D), then move up to around 8,9k (point E), and then continue down again to the downside of the triangle, and from there drop down really hard.
A symmetrical triangle can also break to the upside, but if it plays out like drawn on my chart, the probability of a breakdown will be much higher. If we do break down, we will see some vicious selling, that could get ugly really fast.
From an Elliott wave perspective, the triangle would form a large wave B in an ABC correction, with the 5-wave-structure before it being wave A.
One problem I see is that wave 4 (of A) is overlapping wave 1, which is not allowed in Elliott wave theory. However, the end of wave 1 was just a large wick, so if we can ignore it or not, is debatable.
So what am I gonna do?
First of all, I will wait if this triangle continues to play out like on my chart, or not.
If it does, then I will watch if we turn around when we reach point E. If we do, I will sell all my BTC (and probably all of my alts, too).
In addition, if we break down from the triangle, I will short the hell out of our good ol' friend Bitcoin.
What could be the downside targets?
1.) If wave C would have the same length as wave A (which is typical), that would bring us to under -4,000$. Yes, minus... so that is not a very likely target :)
2.) If we assume an 0.618 extension instead, that would bring us to the 400-500$ range.
3.) If we forget about Elliott, and just use the standard method of determining a target for a triangle, that would bring us to around 2,000$.
I still have my doubts if this triangle will play out, but as I said, we need to keep an eye on it.
A sustained break above the upper side of the triangle would invalidate this analysis.
Note
If you find this post helpful or at least worth reading, please hit the Like button. Thanks.Note
Well it's becoming more and more likely with each day, that this triangle will play out.Note
Now it's getting really interesting.Let's see if the triangle can offer some support at the 7k range.
If it does, I will go long from there.
Note
We are only about 100 points or 1% away from the downside of the triangle.Let's see what happens, when we get there.
Note
We are moving in some kind of a downtrend channel, which will cross the downside of the triangle in 1-2 days.Note
It looks like the drop to the triangle will coincide with the daily RSI touching or dropping below 30.Historically, we always got a strong reaction once that happened - but nothing is guaranteed, of course.
Note
Prepare for impact!Note
We have arrived at the target!Unleash the bulls!
Mind you, we might still touch the triangle or drop below it a few more times, but hopefully see a real bounce very soon.
Trade closed: target reached
Well, well, well.If that wasn't a precision landing, then I don't know what is.
It is still possible that we will retest the bottom of triangle again, but at the moment we're looking good.
Note
We are obviously at a very critical point now.Has my triangle been invalidated?
Yes and no.
We clearly fell below it, but technically it would only get invalidated if we fell below point B, which is around the 6,450$ region (red horizontal line on screenshot):
We are at a decision point here. The fact we're not really moving anywhere for over 2 days now tells us that most people are on the sidelines, waiting to see what will happen.
Note
Triangle broken.Now we are in God's hands, lol.
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