It's been a week since I highlighted the head and shoulders pattern and finally we have the break of the neckline. Read on to see the update.
***Disclaimer***
Please keep in mind: The risk of loss in trading can be substantial. I am not offering financial advice nor am I telling you how or what you should be trading. I will simply be applying charting techniques I have learnt over the years. If, of your own free will, you decide to trade never trade with money you cannot afford to lose and if you do trade, try to spread out your trades on multiple assets. A diverse portfolio is much better than only holding a single asset.
***End of Disclaimer***
Bitcoin/US Dollar (BTC/USD) - Daily Chart - Head and Shoulders Pattern
On the 4th July I wrote an article were we saw a nice head and shoulders pattern on the Bitcoin vs US Dollar chart daily chart. For those of you who missed it you can see it here : Crypto Charts Analysis #1 Bitcoin 4th July 2017.
So we were waiting for one of two things to happen. We would either have a break of the high of the right shoulder, which would have meant that the head and shoulders pattern failed or a break of the neckline which would then start the ball rolling on the pattern playing out it's course. And... drum roll please.... today the neckline has been broken and we are about to see the first candlestick close below the neckline.
But lets not rush and panic too much. I don't see Bitcoin crashing and burning. We would really need to see something big for this to happen like another coin which people believe in to be THE asset to hold. But as yet I don't think we have seen anything like that. Seems like fear is currently driving the market. Please let me know if you think otherwise.
If this was one of the fiat currency pairs I would probably be looking for a short position but it's not just a fiat currency, it's bitcoin.
I am waiting for key areas where I would be looking to buy in and stock on Bitcoin prior to the SegWit Fork which will then probably push prices up. Again this is all speculation and anything could happen.
So technically what could happen?
- We could see price bounce back up and past the neckline.
- We could see a retest of the neckline after which we would see a drop till investors and think that Bitcoin is not overvalued any more and worth investing in.
- Price could just keep dropping till investors and think that Bitcoin is not overvalued any more and worth investing in.
If I had to guess, and I hate guessing, I would go for 2 or 3. Especially with crypto guessing is like walking a knifes edge. Any news article could swing prices either way. And these could be huge swings.
Maybe now will be the time when the big investors will hop onto the Bitcoin train and really pump the price. But I don't want to speculate. I'll try to keep this as true to technical analysis as possible.
As always only time will tell.
Key Levels to look out for :
- $ 1900
- $ 1700
- $ 1300
To see the full analysis of this Head and Shoulders Pattern check out my previous post Crypto Charts Analysis #1 Bitcoin 4th July 2017.
So fellow Steemians, investors, traders and crypto enthusiasts what is your take on where the price of Bitcoin is going? Do you agree or disagree with this analysis or do you have your take on what the chart is showing ?
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Resources
Coinigy - Online chart tools for Cryptocurrencies - Affiliate link
Coin Market Cap - Excellent resource with a loads of crypto data