Not much to say. Kinda wrung out. This was a rather painful sell off and it happened right at the trend line which has played a significant role in price action for almost a year. I was hoping to see it flip one more to support as we did last September and November and I was expecting a lot of thrash until it became clear that the trendline was established. But after today's rejection it seems clear that this lower high has really been nailed in.
Crypto double tops don't follow the strict requirements. Traditionally you are looking for the two tops to be within 5% of one another and these tops are not. They are close though, at about 8%, with a decimal off depending on exchange.
Target setting
- The official entry for a double top is at the valley low, or in this case $1,700.48 for Binance. Waiting for confirmation for a technical entry is important because if it doesn't reach the valley low there is a 60% chance what you are looking at isn't a double top . And then the subsequent targets are in the waste bin.
- Once the valley low is reached the target is the launch platform or the base that provided the foundation for price rally. As I look at it it is the orange shaded area or the red shaded area.
- The VPVR shows that the possible double top formation occurs almost completely above the value area which contains 68% of all of the price action of this uptrend from the Covid 19 lows. Unfortunately my assumption is that this low volume means that retail "dumb" money was doing most of the buying and "smart" money selling tops. Below we see bitcoin from the point of breakout in mid 2016 to just prior to the dump in 2018 with the developing value area on top. Almost all of the price action at the top was way above the value area.
Yay! 🤗
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