As we discussed last week, the pattern for BTC looks a lot like consolidation. This week I wanted to see if we can even extent that to a much larger timeframe. Let's first revisit the channel breakout I eluded to last week and which actually happened. Or did it? I think I was wrong in the way I drew the channel, ignoring the lack of confirmation touches on the bottom channel. Because what do we see now?
The red line indicates the top of the 'previous channel' and it seems like a good, solid and impulsive breakout. Volume wasn't massive though and there is no immediate continuation. Of course, most breakouts retest the resistance they broke, so hard to be definitive. However, when using the bottom touches as the base for a channel we see an interesting one developing. Of course, the day is young and perhaps the channel won't 'confirm' (if there is such a thing) and price will continue up.
Jn fact, that would not totally surprise me, albeit that the target would be quite elevated. I just do not see us breaking 10K anytime soon. But don't listen to me, because I have been calling for legacy markets to collapse for a while now and they all go berserk, so hey ho... Let's investigate by looking at this as possible long term consolidation.
I have to stretch that we are entering lalaland here. It is one awful looking pennant, but it does make sense in the hyper bullish long term count. So, even if we have one more correction to the bottom of the long term TR and the triangle (let's say around mid 6s to low 7s) we could be in for a hell of a surprise. That would take at least till the end of the year to play out though, unless BTC decides to surprise us here.
We can even zoom out further, and why not take the BLX chart for that. If you like Elliott Wave, you might get a kick out of this count. It does work, but let's not waste time on too many details.
Is it hopium? I think so, but I also did not expect Brexit, Trump, Corona and the entirety of 2020, so what do I know, right? In any case, the 4th wave is often a pennant and a short 2 (like here) is often followed by a long 4th. So it all makes sense. In this count, you need to realise that we can bounce now, at 6K (most likely) but also at around 4000/4500. I can even turn the pennant in a flag and then even below 2K is not 'bearish' but just 'healthy consolidation'. I am not 100% sure it is actually healthy, but it would fit my internal narrative about the likely development of the markets in general better.
So, more a long term view this time, mostly because the sideways (lack of) action is boring. That said, when you get bored, that is when stuff happens all of a sudden. If BTC volatility is low, your awareness and risk management should be high.
So, as always, I encourage you to trade safe, trade responsibly and wear a mask when you go outside!
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