Bitcoin to $18,666 - Bull Flag Potentials & Breakdown

13 Okt 2019

Let us start by saying, FCK YES! \u2028
We smashed right into the target around $7.7-8k For those of you in the bear family that follow this closely, I had received so many emails the morning of this drop. People were so grateful, some messages thanking us for helping them save thousands of dollars by including the stop loss into their strategy for their portfolios. They already had set buys and are now sitting excited. I want to lean into the three potentials I am looking at, but still, stand very strongly by my assertion that we are on our way to 50k fast. This is important to look at the variables. Now that we are down this low, we can see a bit more fear come into the markets but there are some very strong indicators I want us to focus on.
So let us start here- We had been hoping this bull flag would present itself based of our momentum down into the 200 MA Daily- We have stubbed right up against it and formed what is known as the bull flag! These are usually continuation patterns and have a very strong probability of occurring. Yes, We could drop down and touch the 314 MA Daily as well, but, This flag pattern is seen as a very strong indicator for us, and if you look at the previous newsletters and videos, I had left this drawn in there, for obvious reasons now. Lets take a look and incorporate a little bit of study as we use this as the perfect opportunity to discuss the bull flag parameters as it can be used in trading frequently!



Fly your Bull Flag High!
This is a rough drawing, as in the case of the flag pole and flag that we can see on bitcoin, First identify the(flag pole) Usually a very strong upward trend is noticeable and what we search for. Through the duration of this uptrend, eventually, prices need to rest and consolidate those gains. This price consolidation becomes the ‘flag’ of the pattern. The flag portion of the pattern tends to be a gently downward sloping price channel. The second notion is that if we break a 50% retracement. The flag is invalidated, and whoopsie, we are in for a bear market that none of us want, yet, we won’t venture there yet. As this is a very strong signal and it’s more important to focus on what is likely just right around the corner.
The next important notion, is to estimate the peak of the next concurrent wave that is to be expected and as long as we do not invalidate this move downwards with a larger the 50% downside, we are good to go. It is helpful to note that some bull flags may actually form a slight megaphone like structure and break very very close to the 50% retracement. If this is the case, we would see an extension from the current price, equivalent to the price of the last move in bitcoin!
So where would that take us? Let’s take a look at the next potential extension.


The Flags Extension!
Now, if we take the flags pole, copy it and move it to the bottom of the flag itself, the picture of bitcoins particular movement becomes more noticeable and very exciting, Although the poles extension can go much higher, and I believe it might, What we want to do is at least get a general assessment of what’s going to happen before it does. After we look at the upside, which is where I am and have been leaning since we broke out of 6k.
The flag pole here could have us moving into this next wave as high as around $19,000 USD!\u2028
\u2028
That is an incredible potential and it makes us stop and think, WOW! My original thought was that we could see 50k quite quickly, and this is leading us to those steps. Now, as I am sure many of you are wondering, what happens if we start to break into the 50% retracement area and how would that effect Bitcoins current price projections.
Well, that is a great question, the downside here is 2 fold, First we want to recognize that there are two potentials for a downside and those are based of two different methods of technically analyzing the charts that we see in front of us. So let’s dive in and take a look at those possibilities as they end up in very different outcomes.

- Downside A -
This particular outcome is not that devastating to our first longer term outlook and actually can still potentially be seen as a bull flag. As I mentioned in the first part about the bull flags, they can sometimes appear as a megaphone in shape, so instead of bouncing here around the 200 MA daily. Which is the green line and where we have currently reached. This would drag us down to the 314 MA on the daily and would have us compacting finally around 6.6k USD
Luckily this particular downside potential still equates to a quick switch and still has us leading to much higher prices in the intermediary.
The important part here is to recognize that as of now, Our price has only retraced around 38% of the original price high, which is perfectly fitting for a bull flag. This second one here hits around 48% as a retracement and is just at the final edges of what can be seen as a strong bull flag and if we break below the 314 MA daily with any strength this would invalidate all of our thoughts. It would be the worst of the worst case scenarios for bitcoins price.
What we can see here is that if we break below the 314 Moving Average on the daily we would like end up with Downside B- Which we will dive into and take a look at on the next page.