Public Chart: And a Quick Look at Bitcoin

The last thing I want to look at this weekend is Bitcoin.

On the one hand, we may view this as a failed breakdown from this big bear flag, constructed from parallel rails:


We dropped out of it, but then jumped right back into it. And under normal circumstances, this would be pretty bullish.

But on the other hand, the decline to what I have labelled as “Green 1” is very severe and looks impulsive. And the parallel rails don’t look very good because it doesn’t capture a lot of the price action.

So if we draw a bearish wedge instead, it looks much more dreadful:


Drawing the structure this way makes it look much more like a retest after a genuine breakdown.

So, a drop from here would be very bad. The typical extension for a wave 3 down (if this is a Green 2 we’re at now) could carry this to $10,700 (or lower). Yikes.

I don’t know if it’s going to break down. But if it does, trouble is afoot.

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