"Jack's Trading Classroom" Bitcoin's converging pattern and Ethereum's potential head and shoulders top

Original Jack's trading classroom "Bitcoin's Convergence Pattern and Ethereum's Potential Head and Shoulders"

In the chart, we can see that the blue trend line is the previously mentioned descending resistance trend line. After breaking through the original set descending resistance trend line and reaching the price range of 9419-9490.0, Bitcoin experienced a pullback. The price failed to hold above the original descending resistance trend line and broke below it, leading us to determine that this retracement trend failed.

Currently, we see on the hourly candlestick chart of BTCUSD that after the trend breakout failure, Bitcoin formed a new high at 9471.5. This new high point led to the formation of a new descending trend line. Additionally, we can see on the chart that the bottom low points continue to rise, forming an ascending support trend line, transitioning into a medium-term three small converging pattern.

Regarding the consolidation judgment, the market is expected to remain in a range-bound pattern. It is suggested to enter long or short positions based on trend line breakouts. If the upper converging resistance trend line is broken, consider entering a long position; conversely, if the lower converging support trend line is breached, consider entering a short position. Stop loss points can be set at previous highs or lows, or at support/resistance levels.

Upper resistance levels
R1 9277.5
R2 9377.5
R3 9419.0*
R4 9648.0
R5 10124.0

Lower support levels
S1 9138.5
S2 8862.0
S3 8089.0

Potential Head and Shoulders Pattern for ETHUSD

Currently, on the hourly candlestick chart of ETHUSD, Ethereum shows a typical potential head and shoulders pattern. Two troughs have already formed, representing the left shoulder and head. The high point of the right shoulder is yet to be confirmed. Based on Fibonacci and support/resistance levels, it is highly likely that the high point of the right shoulder will fall between the Fibonacci sequence 38.2% - 43.6% and the resistance level of 243.75. Following the head and shoulders pattern, consider entering a short position after the low point of the neckline at 234.50 is breached.

The first profit-taking target range can be set between the Fibonacci levels 127.2% - 138.2% at 228.90 - 230.50. The second profit-taking target can be set at Fibonacci level 200% at 219.80. It is recommended to set the stop-loss at the high point after the formation of the right shoulder. If the risk-reward ratio after the pattern formation is greater than 1.5:1, remember to enter the position upon breakout to avoid additional risks.

Upper resistance level
R1 243.75
Lower support level
S1 232.05

In recent days, the digital currency market has experienced significant volatility. It is advised for traders to strictly implement risk management and avoid high leverage and high contract volume operations to prevent additional losses caused by volatile market conditions. This article reflects personal opinions, please read with caution, as cryptocurrency trading may pose risks to your capital.

WeChat Official Account: Jack's Trading Classroom
Personal Website: jackbtc.io