As per my previous analysis here, BTC is moving within a well defined on the 1 day chart. The market refused an early breakout yesterday and you can see how it happened by analyzing the 4h chart above.
Current setup and likely outcome
BTC completed an impulse sequence (12345) uniting the edges of the larger timeframe triangle. The corrective wave A unfolded today and it looks like wave B may have started. Be careful if you want to trade it, it's not called a bull trap for nothing!
Given the larger , wave C may rest on the supporting when it comes. That may be the sweet spot for long positions.
First I should mention that I'm favoring the pattern you see above over all other outcomes because 1) it plays in perfectly with the larger timeframe triangle and 2) it fits in nicely with the textbook impulse waves we've seen so far. However, we could also see:
- an ABCDE triangle that could end in a breakout that also ends the larger triangle.
- upward breakout instead of wave B (less likely due to pattern)
- wave C acting as trigger for downward breakout, thus ending the larger . I don't think wave C will get that far down, but we'll have to see how the red line support holds before we can rule this one out.
Ways to play this set-up
- Wave B could earn some short term profits if played wisely or grant the possibility of favorably exiting previously placed trades.
- If we do see a wave C, one could open an average sized long position when the price hits the red support line and add to it gradually as the bounce-back is confirmed.
This post reflects my opinion and is not to be considered financial advice.
Let's see that 15k breaking!