Don’t forget: you don’t need to jump on every trade. Practice patience during a choppy consolidation.
The zig-zag price behaviour is beating up retail traders pretty badly. We have no clear wave structure and we are dancing around the baseline (blue line), which is acting a bit like a short-term bullish/bearish line.
Volume is decreasing in the current consolidation phase, which is also a sign of retail punter fatigue. The good thing is that it gives me a little more confidence that we might be in an early consolidation phase.
To gain more bullish confidence I need to see the following:
– The price needs to hold above the baseline
– Overall (the currently bearish cloud: red) needs to slim down
– The price needs to push into the cloud … and stay there
If we get to that stage, we are two-thirds through the consolidation.
If we do not make it to that stage… $29k is imminent.
P.S. If you want to look at a really scary chart, check out the BTC$ monthly chart and display it nonlogarithmically.
You can pretty much copy and paste what I just said about BTC$. The only thing that is different is that it looks like we are already a little bit further into the bullish consolidation. We are above the baseline, and the price already went into the cloud.
But the cloud is still wide, and we need more price bars above the baseline and within the cloud.
If the price cannot hold within the cloud, say hello to the $2k level again.
P.S. The monthly chart contains a warning sign: a longlegged doji (Japanese candlestick pattern).
This is one of the few charts I glanced at this morning that actually looks pretty promising to the upside.
In terms of the indicators we were looking at on the other two charts, we are almost good to go higher.
– Price is above the baseline
– Price is through the cloud
– The cloud is still bearish, but very thin and flip-flopping
If you are an Elliot Wave kind of person, you can count the correction from the top as an irregular ABC correction with the C not being lower than the A.
In my view, the uptrend will be confirmed if we push higher than the peak of B and then stay above the cloud until we reach the local ATH.