The head and shoulders outlines a lower peak, higher peak, lower peak formation. The neckline is the line that connects the lows of the highs (peaks). Once the neckline was broken the move accelerates down.
The projected distance down is the distance between the head and the lowest shoulder. Here I have measured that distance (shaded area) and then measured the same distance down from the neck point low, which gives the target of the pink line.
However, before this line there is an important support level around $28,000 ish.
BTC has tried to move about the old support line of 42,000. This is now a resistance. And the attempted move up failed. Now we're below it BTC might make another attempt up, but more likely to move lower to 28,000. If it doesn't hold the head and shoulders move is completed at the pink line.
Its so volatile it is hard to know how to play this, honestly even though I think its going down this is too volatile for me to trade short. I'll get stopped out on a rebound. My plan is to see which support line plays out and enter long once my indicators show an entry move back up.
Be careful here, risk manage your trades, which means look at the ATR (through the roof!) and use it to position size accordingly so if you get it wrong you live to trade another day.
Best of luck.
The projected distance down is the distance between the head and the lowest shoulder. Here I have measured that distance (shaded area) and then measured the same distance down from the neck point low, which gives the target of the pink line.
However, before this line there is an important support level around $28,000 ish.
BTC has tried to move about the old support line of 42,000. This is now a resistance. And the attempted move up failed. Now we're below it BTC might make another attempt up, but more likely to move lower to 28,000. If it doesn't hold the head and shoulders move is completed at the pink line.
Its so volatile it is hard to know how to play this, honestly even though I think its going down this is too volatile for me to trade short. I'll get stopped out on a rebound. My plan is to see which support line plays out and enter long once my indicators show an entry move back up.
Be careful here, risk manage your trades, which means look at the ATR (through the roof!) and use it to position size accordingly so if you get it wrong you live to trade another day.
Best of luck.
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