75 / 75 is a classic chart pattern where an immature market crashed hard but holding the absolute 25% price level off the extreme high for a long time. As long as the 25% level continues to hold, the market will eventually climb out of this bottom and gun for the 75% mark of the drop.
In the case of Bitcoin, that upside target is around $890.
The main issue though, is that it can take very a long time to develop such bottom. Bitcoin may have to spend many months down here to build a base.
The other issue is that if the 25% failed to hold up, it will turn into a death spiral like many companies that ended in bankruptcy.
Hence, the best time to play on the long side on Bitcoin is to wait until the base is formed and that it rallies above the bottom 25% of the entire drop (around $490). This will give you a setup with defined risk and a market that moves to trade with, as oppose to sitting on a position and hope for the best.
Part of Art of Chart Reading
Traders often focus on how accurate certain chart patterns are and how much money you can make from using the patterns. The more experienced ones ...
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Part of Art of Chart Reading
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Bitcoin: Where to Go From Here Dec 2014
Following is the weekly chart of Bitcoin.
75 / 75 is a classic chart pattern where an immature market crashed hard but holding the absolute 25% price level off the extreme high for a long time. As long as the 25% level continues to hold, the market will eventually climb out of this bottom and gun for the 75% mark of the drop.
In the case of Bitcoin, that upside target is around $890.
The main issue though, is that it can take very a long time to develop such bottom. Bitcoin may have to spend many months down here to build a base.
The other issue is that if the 25% failed to hold up, it will turn into a death spiral like many companies that ended in bankruptcy.
Hence, the best time to play on the long side on Bitcoin is to wait until the base is formed and that it rallies above the bottom 25% of the entire drop (around $490). This will give you a setup with defined risk and a market that moves to trade with, as oppose to sitting on a position and hope for the best.
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