BTCUSD has been down the past few days, and is looking pretty close to the chart I first published. However, after looking at it a bit more closely, I noticed the strong bear divergence on the daily leading up to this (similar to one shown in 2013 on the double top). I believe due to margin trading being more prevalent and bitcoin futures, which did not exist in 2013, rather than seeing a double top we pushed higher. This may have been due to momentum as well, but nevertheless this manifested itself as a rising wedge that has sense broken down.
What we need to watch here is for the bounce. The top of the second bounce (look for 0.618 fib retrace) is a potentially good place to open a short position. We would then target the 1.272 fib extension from the first bottom. If we assume we are currently bottoming out (less likely) then we could expect to bounce to roughly $17,875, then proceed downwards towards our bottom of $13,800. Although due to many factors, I believe we have not found our first bottom yet, the higher you climb the further you fall? I am predicting a bottom around 11k-12k. This would have us bouncing to about $16,500 then bottoming out in the 10k-9k range. Confirmation of bottom should reveal itself as a bull divergence on the daily RSI.
MAX PREDICTED BOTTOM: $7,750 MIN PREDICTED BOTTOM: $13,800
*THIS IS NOT TRADING ADVICE, JUST MY PERSONAL THOUGHTS, OPINIONS AND OBSERVATIONS*
EDIT: The left plot is not posting the correct time for whatever reason, drag it back a bit to see the relevant time frame.
@imkeshav, We should be prepared for that probability, but not necessarily. Next target would be $8000-$7500. Check out some of my more recent ideas.
imkeshav
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@Manifested, Can we go lower than that? Here is an idea what do you think? Are we in the 4th wave overall?
Manifested
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@imkeshav, Of course we could go lower. Anything is a possibility, but we must look at the most likely probabilities and trade off of that alone. Hope is not a strategy.