On this chart of Clit Coin, we see a textbook example of one of the most powerful entry patterns in meme coin trading.
What to Look For:
- Consolidation at the Top: A period of price stabilization after an initial move.
- Steep Decline: A sharp downward move creating significant value opportunity.
- Rounded Bottom: A smooth, curving bottom formation signaling a potential reversal.
- Steep Incline Out of the Rounded Bottom: The upward breakout confirming the pattern.
In this example, two potential entries emerged, both of which worked well. The more aggressive entry came earlier, but I opted for the safer approach, waiting for the breakout at the higher resistance level. Both strategies have their merits. Essentially, this pattern resembles an inverse head-and-shoulders and is easily recognizable on many charts.
Key Insights:
- Volume Matters: Notice the rising volume preceding each breakout—this is critical for confirming the trade’s success.
- Take-Profit Strategy: After hitting my initial three take-profit levels, I left 25% of the position open, setting ambitious new targets at 1,000% and 10,000%. These levels would have been adjusted based on trendline resistance and support had the price continued higher.
Exiting the Trade:
Once the trend broke, I looked for signs that the move was losing momentum. The confirmation came when we broke horizontal support. At that point, I exited the remaining 25% of my position, locking in profits.
Ben Aronson is a self-proclaimed tech rebel and blockchain evangelist with a vendetta against the status quo. When he’s not ranting about central banks or corporate greed, he’s dissecting code, dreaming of a decentralized utopia, and plotting how crypto can set fire to every outdated institution standing in its way. Equal parts cynic and visionary, Ben writes with a passion for tech disruption and a healthy dose of “burn it all down” energy.