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:

BTC

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:

BTC

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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