Bearish pattern looking more apparent will it break down?
The current situation:
1. Previously, it looked like price action had an ascending triangle pattern going, which was a bullish pattern. Currently, it is starting to look more like a head and shoulders pattern, a bearish pattern. The rather ambiguous neckline, which is also the gold line and a Fib level, is at about 3.9 USD and is the current support. The measured target of the pattern is at about 3.4 USD and there are several moving averages at about the 3.8 USD level that can act as support between the breakdown below the neckline and the measured target.
2. There was a RSI reading of about 77 on the 6HR chart for the last high made, so possible bearish divergence may occur if the next high made creates an equal or lower RSI reading and can prompt a pullback.
The bullish case:
1. If the price action holds above the neckline and retest the 4.35 USD level, which can still validate the ascending triangle pattern while negating the head and shoulders pattern. OR
2. If the price action breaks below the neckline and bounces off one of the moving averages at about 3.8 USD currently to retest the 4.35 level, which also negates the the breakout of the head and shoulders pattern.
The bearish case: price action breaks below the neckline and does not bounce off one of the moving averages at about 3.8 USD.
*Let me know in the comment section if you agree or disagree, would love to hear your ideas too.
*These are purely my speculations and not financial advice. You should always do your own due diligence before trading or investing.
1. Previously, it looked like price action had an ascending triangle pattern going, which was a bullish pattern. Currently, it is starting to look more like a head and shoulders pattern, a bearish pattern. The rather ambiguous neckline, which is also the gold line and a Fib level, is at about 3.9 USD and is the current support. The measured target of the pattern is at about 3.4 USD and there are several moving averages at about the 3.8 USD level that can act as support between the breakdown below the neckline and the measured target.
2. There was a RSI reading of about 77 on the 6HR chart for the last high made, so possible bearish divergence may occur if the next high made creates an equal or lower RSI reading and can prompt a pullback.
The bullish case:
1. If the price action holds above the neckline and retest the 4.35 USD level, which can still validate the ascending triangle pattern while negating the head and shoulders pattern. OR
2. If the price action breaks below the neckline and bounces off one of the moving averages at about 3.8 USD currently to retest the 4.35 level, which also negates the the breakout of the head and shoulders pattern.
The bearish case: price action breaks below the neckline and does not bounce off one of the moving averages at about 3.8 USD.
*Let me know in the comment section if you agree or disagree, would love to hear your ideas too.
*These are purely my speculations and not financial advice. You should always do your own due diligence before trading or investing.
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