Unfortunately for the bitcoin bulls the market continues to respond well to the technicals which remain overwhelmingly bearish at this time which is why it comes as no surprise that prices are moving steadily lower right now. While we continue to think that this will be the case for the foreseeable future given we have yet to establish a sustainable cycle low, we are still of the opinion that the final capitulatory washout is not far down the road meaning there is a good chance it happens before year end. When this capitulation does materialize then supply and demand will overtake the technicals and things will begin to reverse back to bullish very quickly on the near-term charts, although until then the bearish charts are fully in control which likely means [members-only content] in the not too distant future.
We'll take one final look at the near-term technical setup this week via the 4-hour chart where we can see that price has moved below the local lows off of the [members-only content] signal a few days ago on a relatively large [members-only content] and bearish candle formation that is keeping market structure very heavy despite still being officially intact. Also note that the EMA's are slowly stacking to the downside and are acting as resistance for the time being, the 50 SMA is turning lower once again and is about to be crossed below by the still falling 100 SMA, the 200 SMA remains in a steady downtrend, new dynamic resistance has started to build around [members-only content] $ in addition to the even stronger levels above there, and the Ichimoku Cloud is still expanding to the downside above and out in front of the market, all suggesting that [members-only content] moving forward.
As far as momentum and volume are concerned, Willy, RSI, and the Stochastic are all still treading water just above oversold territory but are not yet fully recharged, MACD is trying to recapture its zeroline but has so far failed to do so, and PPO remains firmly neutral which is better for the bears moving forward than the bulls which is another reason why we continue to lean to the downside until further notice. Additionally, increasingly bearish exchange volumes, a bleeding A/D line, and an extremely thin volume profile setup below the market are all confirming the downward bias, at least down [members-only content], which is why we are staying on the sidelines until further notice.
Next up is the 3-day chart before we zoom out to the weekly tomorrow, and we can see that price appears to finally be setting up for a close within the inner demand area that has been acting as support this past week on a [members-only content] signal and small but bearish gravestone doji candle while market structure remains broken and heavy, all of which points to lower prices over the coming days and weeks. Also note that the EMA's are still stacking to the downside, the 50 and 100 SMA continue to fall and the 100 is close to crossing below the 200 soon, new dynamic resistance continues to build around [members-only content] $ in addition to the multiple other even stronger levels just above [members-only content] $, and the Ichimoku Cloud remains firmly bearish above and out in front of the market, so it seems as though the bulls will need a Holiday miracle to prevent a breakdown below [members-only content] $.
Moving on to momentum and volume, notice that the Stochastic is back in officially oversold territory and PPO continues to flash strong buy signals, both of which are fairly encouraging for the bulls from a medium-term perspective, although Willy and RSI still have some recharging to do and MACD remains weak with no signs of a divergence so shorter-term the outlook still looks fairly dire for the bulls. Having said that, the volume indications are more sanguine than the momentum oscillators considering the A/D line has been fairly steadfast at relatively elevated levels despite the spike in bearish exchange volume recently, and volume profile doesn't look nearly as bad as it should given the current conditions, so again the bulls have something to work with longer-term even though lower prices are likely over the near-term.
At this point, there is not much more we can say or do other than wait for the market to do what it's going to do, which is likely continue to move lower until supply and demand takes over as we mentioned earlier. While this may not be what many market participants want to hear considering the amount of pain that has already been endured by long investors this year, we'll continue to reiterate that we think we are in the final innings of this bear market meaning that a sustainable bottom is not far off and there is some light at the end of the tunnel heading into 2019. No doubt the tunnel is long and the light is dim, but at least things look better heading into next year than they did at the beginning of this year.