Don't Forget the BARR and Falling Wedge on BTCUSD

2019年5月4日

Due to the fast nature of crypto and the assumption that traders are on the younger end of the spectrum I don’t find it surprising that we seem to have forgotten so quickly the larger structures we are in. I came across the falling wedge for this bear market independently and shortly after lots of others chartists saw the wedge and it became popularize and then forgotten as the main driving force in the market. I do admit that I was wrong in supposing we would go deeper into the wedge for that “one last dip” We still have people calling for between $1,000 and $3,000 and that just does not seem to be anywhere near in the immediate future while this wedge is performing.

The targets for the wedge are the black dashed lines as shown, full performance gets us to the height of the wedge ($11,750) and a typical performance gets us the height of the wedge from the point of break out ($9,000). That is our largest macro trend that we can be trading right now, all analysis based on market structure should be based on this wedge performance.

Now, remember how the Bump and Run Reversal (BARR) pattern took over the crypto new cycle a couple of weeks ago? We have in large part already forgotten that as people dig back into their 4h charts for their swing trades but I consider that a mistake. The green lines show the BARR and the first targets on the BARR bottom are based on the height of the lead in trend line. The lower target of 6,800 is probably the most textbook target we could get because it is based on the arithmetic drawing of the chart, which is how the BARR formation discoverer tells us to do it. If we speculate that this is crypto and the log charts are the most powerful chart we could be using we then go and use the top target of about $7,300.

Additionally we clearly have a rising channel that has been developing since the April Fool’s Day pump, which is another month of bullish price action that has taken us over the 50w SMA. Just a note, the 200w and 50w are displayed on the daily chart chart using a programmable moving average. I prefer this method of showing the higher timeframe moving averages because it is one tool to use on both markets that are 24-7-365 as well as markets that are your standard trading hours with holidays. The stepped nature of the MAs also serves as a reminder that I am still trying to think big picture while tunneling down somewhat.

Scenarios from Here

• BTCUSD price action confirms the 50 W as support for the first time since late March & Early April of 2018 and the BARR and Falling Wedge formations continue to perform to between the $9000 and $11,700. Some consolidation is to be expected between the fulfillment of the BARR and Falling Wedge targets. This means we are transitioning into a bull market and we should expect a lot of 30-50% retracements on the way up on this moon shot. The chart below shows the last time the 50W MA was confirmed as support till the peak of the bull market. I put the chances of this happening somewhere above 80%
  
• The price action fails to find support on the 50W and instead slips to the 200w MA (or perhaps the 50w EMA). I think this is the minority position and has less than 20% chance of happening. The chart below shows the last time the price action successfully teste the 50W and there were two attempts by the bears to get the price below the 50. The whole process took 4-6 days, depending on how you want to count it. We could have a similar or more prolonged testing and the longer it takes the more bearish I consider it. This is our wedge throwback scenario, which also requires the BARR bottom to fail as well.
  
• The final scenario, which I see as having single digit percent chance of happening, is the Wedge and BAR completely fail and we have to look at new downside targets
  

Conclusion
A look left shows that between $5,500 and $6,000 has been a very critical area over the last year and a half or so. We first broke that level October 2017 and retested it that November and quickly went to $19,000. The $6,000 level was a are floor when we were in distribution from February to November in 2018 and $5,500 was the cliff we fell off in November to get to our floor in the bear market. We should be expecting another powerful move from here and there is a chance this is literally the last time we see this level ever again if we break to the upside.

Finally, the linked comment shows when I first noticed the falling wedge and shows how I thought we were going to be going deeper into the wedge and if you hit play on the chart you can see how that was wrong.

2019年5月7日

註釋

Here is the lower timeframe of what we popped out of. I DM this to my brother before the breakout which makes me feel great.
s3.amazonaws.com/tradingview/snapshots/i/IUsJvPwl.png
Zooming out a bit you can see the price actino went from one bullish channel to another, and right now the price action hopped out of the top of the channel and is finding support where once there was resistance. If we view the diamond has a haft mast pennant formation the target is near $6,400. That puts us roughly half way to our BARR target.

2019年5月11日

註釋

If you are following this post I hope you hit the play button above and see how we are approaching our BARR target #1. This move doens't show sign of weakining yet and I I personally am not taking profit just yet.

2019年5月12日

交易結束：目標達成

Hit the play button above and you will see the top BARR target was reached. I think this move is over and we are going to consolidate similar to the consolidation in 2015. The chart below is daily data but with weekly moving averages programmed in there. We see both now and last time we lanced through the 100w and we are now probably going to retrace similarly. The 50w is much closer this time and so I suspect we won’t retrace as far. I think there was so much activity at 6.4k that we won’t really go much further than that. We are due for consolidation as the 50 and 20W MAs become confirmed as support.