With the bearish flag forming and holding as a strong support, bouncing many times. I personally believe that a strong downward movement is imminent as it cannot continue to hold. Each time it attempts to uptrend the 55 ema (yellow line) acts as a strong resistance.
I'm targeting a 1:1 Fibonacci extension of the 1st wave down to reach wave 3, at the moment it's moving sideways, however, this is due to the bearish flag.
The 5th wave down is targeted at 1.618 Fibonacci extensions of wave 1; this travels just past the 0.618 Fibonacci retracements of the 5 step impulse wave up (Below). This is the golden ratio where the price likes to drop to as many traders use this level. Between these levels is the support of wave 2 which adds even more strength to this zone
Long term I remain bullish as if it corrects this far, 0.618 is a normal correction and an impulsive wave up may be next. Up to 9930 GBP (13868.24 USD time of writing) (From a 1:1 extension of wave 1, as wave 3 is often the longest and never the shortest) and after a correction, a move to 12650 GBP (17666.99 USD time of writing) is definitely possible.
Of course, the flag may not break and if the price goes above 7100 GBP with the volume I would discount this play and the bullish count will be more plausible.
I'm going to short this 2 ways:
I could short now with this setup however this is more of a risk and would play a tight stop loss...
A safer short is if wave 1 is broke with high volume I will short...
Another short is from where wave 4 finishes (targeting a 0.618 fib retracement)...
A more conservative and safe short is when wave 5 falls past the support zone of wave 3...
Once wave 3 finishes a quick long play may be possible...!
If charting in USD is easier let me know
PEACE, LOVE & CRYPTO
