The chart below is a weekly demand zone where I expect the trend will reverse. There should be an accumulation of orders deeper into the level where we will be able to see a bounce and head back up.
This is the first significant level on the weekly chart. Look at all the bullish candles leading up to the $20,000 peak - there isn't anything holding it up on the weekly chart which has given price the ability to drop straight through it all. We see this on every timeframe on every chart - once there has been a parabolic surge in a similar way to this, price will more often that not return to the origin, and the origin in this case is this weekly demand level.
The next chart is the 4 hourly chart and shows where price can drop to. The deeper in the level, the better, and I've found a period of compression (as marked by the white diagonal line, and have marked the limits of that level with the yellow lines) where I will start to look at buying depending on the price action at the time. I'd be surprised to see us completely reverse before this level.
Things to watch out for:
- shorter red candles
- price compressing (i.e. more sideways movement)
- long bearish wicks
