BTC correction! Understanding levels and timing
BTC has started two quick down moves in the last two days inside the broader range. Both targets from my posting yesterday have been reached (11200/10800).
But where do these moves start and when? And why was the second correction double the size of the first one? The market is fooling people all the time, so just when everybody believes in the strength of the uptrend again the biggest correction occurs.
Now lets look at both corrections in detail...
Correction 1:
The downmove starts after my target at 11650 from a leg up had been hit (red arrow 1).
There is a bulltrap by breaking above the prior little double top.
The target of the correction is at 11200 (blue circle) which is the breakout area, so there might be some breakeven stops that are being hit from the breakout traders.
Why didn't the downmove continue down to 10800, the uptrend channel had been broken, right?
Because it was the first break of the channel and we can expect some legs up to a new high or at least a retest of the high!
Correction 2:
After correction 1 prices move higher in a new small uptrend, but there is another trap waiting, the same structure I always talk about: The break of the trendline and then two small legs to a new high at 11780.
Now the bigger correction can start (red arrow 2) because:
- the bigger and small uptrend have been broken
- afterwards there were 2 or more legs to a new high
- now many bears have given up and closed shorts, longs have bought in on the way up
- and of course there is again a small bulltrap with the break above 11750
What happens when a lot of people are fooled? A quick and steep downtrend, because a lot of stops are being hit and the smart money is shorting, looking for prices to go to the lower side of the range at 10800.
So how exactly did this 1000 point drop unfold?
You can see it clearly in the chart: Again we had the break of the steep trendline and two legs down to the target (blue circle)! You can see this structure over and over again...
What is happening right now?
BTC is still moving below the EMA, I see a possible spike and channel formation.
The target is at 10200-10100 (from legs+support level). Before prices reach that target I would expect a move up to the 10800 area to get some breakeven stops.
But where do these moves start and when? And why was the second correction double the size of the first one? The market is fooling people all the time, so just when everybody believes in the strength of the uptrend again the biggest correction occurs.
Now lets look at both corrections in detail...
Correction 1:
The downmove starts after my target at 11650 from a leg up had been hit (red arrow 1).
There is a bulltrap by breaking above the prior little double top.
The target of the correction is at 11200 (blue circle) which is the breakout area, so there might be some breakeven stops that are being hit from the breakout traders.
Why didn't the downmove continue down to 10800, the uptrend channel had been broken, right?
Because it was the first break of the channel and we can expect some legs up to a new high or at least a retest of the high!
Correction 2:
After correction 1 prices move higher in a new small uptrend, but there is another trap waiting, the same structure I always talk about: The break of the trendline and then two small legs to a new high at 11780.
Now the bigger correction can start (red arrow 2) because:
- the bigger and small uptrend have been broken
- afterwards there were 2 or more legs to a new high
- now many bears have given up and closed shorts, longs have bought in on the way up
- and of course there is again a small bulltrap with the break above 11750
What happens when a lot of people are fooled? A quick and steep downtrend, because a lot of stops are being hit and the smart money is shorting, looking for prices to go to the lower side of the range at 10800.
So how exactly did this 1000 point drop unfold?
You can see it clearly in the chart: Again we had the break of the steep trendline and two legs down to the target (blue circle)! You can see this structure over and over again...
What is happening right now?
BTC is still moving below the EMA, I see a possible spike and channel formation.
The target is at 10200-10100 (from legs+support level). Before prices reach that target I would expect a move up to the 10800 area to get some breakeven stops.
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