It comes as no surprise that bitcoin has been unable to break above the previously discussed 3600 $ resistance level over the past 24 hours considering how significant that area has become, although we are a bit surprised by the fact that the market has rejected a move below 3450 $ and is now consolidating in rather bullish fashion despite the bearish technical setup overall which we will discuss below. This tells us that the bulls have more gas in the tank than we gave them credit for yesterday and there is a fairly decent possibility of a move above 3600 $ on the way to [members-only content] $ before the bears return in order to take advantage of an opportunity to sell before prices move back down to [members-only content]. While we remain skeptical that those lows can actually hold due to the longer-term charts, the recent action does make us question how likely sub-3k $ truly is.
First we'll zoom into the 4-hour chart for a more granular look at the short-term setup where we can see that the breakout yesterday sparked a series of [members-only content] signals that continue today despite the choppy and mixed candle formations recently, and VST market structure has turned bullish all of a sudden although price is struggling with the lower supply area which is keeping short-term market structure bearish, none of which is all that helpful with directionality for the time being. Neither are the short-term moving averages considering the EMA's are already stacking to the upside while the 50 SMA has been broken and is close to reversing higher, while at the same time the 100 SMA continues to fall and is currently acting as resistance, the 200 SMA remains in a steady downtrend, and the Ichimoku Cloud continues to expand to the downside and is also acting as resistance, so the bulls need to make a move above [members-only content] $ soon given the longer-term bias remains bearish overall.
Moving on to momentum and volume, notice that the Stochastic is already pinned in officially overbought territory, Willy and RSI are getting very close to overbought as well, MACD appears to be losing steam, and PPO is flashing strong sell signals, all of which suggest a recharge is needed at some point in the not too distant future but also leaves some room for [members-only content] over the near-term. Additionally, exchange volumes are certainly improving, as is the A/D line which has recovered back to its midline, although the volume profile setup leaves much to be desired both above and below the market which will [members-only content].
We return to the daily chart today as there are some interesting developments emerging that we think are worth discussing before zooming out to the 3-day tomorrow, and we can see that a rare [members-only content] signal printed on fairly bullish candle formation which is being followed up by a [members-only content] bar on a [members-only content] candle that is being rejected by the still bearish upper EMA, all of which are indicative of the very uncertain and indecisive conditions in the marketplace right now. Also note that the [members-only content] have technically been broken which has sparked new weekly support at [members-only content] $, a good sign for the bulls near-term, although price is still struggling to get above that historical resistance and even stronger dots continue to build just above [members-only content] $ so while the rally might have some legs over the coming days the bears are still in control overall.
As far as medium-term momentum and volume are concerned, notice that Willy, RSI, and the Stochastic all continue to slowly move to the upside out of oversold territory with plenty of room to run higher, while MACD continues to pick up steam following a large bullish divergence and PPO is still flashing buy signals, all of which are supportive of a continuation up to the [members-only content] $ area at some point in the near future as long as the [members-only content] $ level can hold on weakness moving forward. That said, recent exchange volumes have been more bullish but still lackluster in general, the A/D line has bounced a bit but remains under pressure overall, and the volume profile setup is still very thin and porous both above and below the market, so we continue to think that this move is countertrend in nature which is why the VST ProTrade setup remains intact for now.
As you could probably tell via today's analysis, it is very tough to get a good technical read on the market right now given how mixed things have gotten over the past few days which is why we want to stay very cautious and conservative until the market gives us a clearer signal of where it wants to move heading into the low-liquidity holidays. While we certainly can't rule out another leg to the upside to test [members-only content] $ as mentioned above, we think the bulls need to act before the end of this work week to avoid a similar fate to what we saw late last week and last weekend (which was a slow grind down to new lows). If they can make the move then we're unlikely to see new cycle lows until the beginning of the year considering a consolidation will probably take hold until then, but if not then the bears could certainly take price below [members-only content] $ before the year is up which is actually what we would expect to happen in that case. Right now its a coin flip which way price heads, but if forced to choose we'd probably say [members-only content] due to the recent price action.