Point and Figure Update
We seem to be entering another phase of consolidation, albeit at a lower level than the previous week’s prices.
If you look at the chart for a longer time frame (going back to May) you will see our double bottom is settling right at the levels seen at the end of May. At that time we had a nine column wide formation that bumped up against $2,300. That resistance has now become support.
If we break that support the next support comes at the trend line which is currently at $1,640. That level is 31 boxes down the price chart. That would be a helluva drop, and I am not expecting that much volatility.
Based on the articles I am reading about August first I expect some movement as people move their bitcoin into Alts or fiat. Most of the stories I’ve read over the past couple of days are pretty alarmist and they paint a very dire picture. I am confident it won’t be as bad as they write.
But—I think it will have a suppressing affect on the price. Two weeks is not that long to wait.
Here are the numbers:
Unless the price rises over 2420 today, we’ve reversed into another column of Os. The lows of last night matched the lows of yesterday, creating a tentative double bottom on the chart.
If the price remains under $2,420 the tentative column of Os becomes official—and the reversal price is at $2,320. This means that we are already over the price point to reverse again to a column of Xs. That is the sign of a consolidating market. People are trading the chop, and that is fine.
The positive breakout would occur at prices up in the $2500’s. If we reverse tomorrow the break out happens at $2,420.
The breakdown would happen if the price drops below $2,260.
The formation is 3 columns wide.
A new metric I am including is the distance between the formation and the trend. As we consolidate that distance is going to shrink. It is not a concern right now, but it is a number we should keep an eye on. We certainly do not want to run into the trend during a consolidation—that would look more like a long term top and it would bode well for the next several months. Once again, we are not there yet.