As the legacy markets in the US get back up and running, the bitcoin markets continue to make progress to the upside given they just recently crossed above the 3950 $ level following a short but necessary consolidation over the past 12 hours that set up the current push higher. While it certainly looks like the bulls are still in control and are itching to push price above the psychologically significant 4000 $ level in the not too distant future, substantial resistance immediately overhead is starting to cause some trouble for the bulls in terms of a continuation so [members-only content] over the next day or two.
We'll zoom out to the 12-hour chart today for a broad view of the short-term setup where we can see that price has broken well above the descending channel over the past few days on [members-only content] signals, and earlier today the still bearish 200 SMA was convincingly taken out on another [members-only content] signal that is keeping market structure bullish over the short-term, all of which bodes well for the bulls moving forward. Also note that the EMA's are still accelerating to the upside, the 100 SMA has joined the 50 SMA in moving higher, and new and quite strong dynamic support is now building around [members-only content] $ in addition to the still active dots below there, all of which should help the bulls play defense when the time comes. That said, the time for defense may be quickly approaching considering price is now well within the [members-only content] zone on some lackluster candle formations with the medium-term supply area sitting just overhead, which is why we are expecting a legitimate retracement over the next 24 - 48 hours to test support in the [members-only content] $ region.
Moving on to momentum and volume, notice that Willy is still trending higher with a little bit of room to run which leaves the door open to [members-only content], although RSI and the Stochastic are both officially overbought, MACD is showing a small bearish divergence, and PPO is close to flashing strong sells signals, all confirming that we are near the end of this rally. The volume profile setup is supportive of this outlook given how porous things still are below the market, although exchange volumes are certainly still bullish and the A/D line remains strong both of which suggest that buying the dip is indeed the correct play.
Next up is the 3-day chart where we can see that both the descending channel and the [members-only content] have been broken to the upside on a [members-only content] signal and bullish candle formation that is improving market structure and increasing the likelihood of a confirmation of the Adam & Eve bottom, all good news for the bulls moving forward. Also note that the EMA's have flatlined so they are close to reversing back to bullish and there still isn't much medium-term resistance until the [members-only content] $ area so there is still some room for another leg up, however the 50 and 100 SMA's remain in steady downtrends and the Ichimoku Cloud is still firmly bearish above and out in front of the market so the bears are sure to return at some point soon (likely around or below that [members-only content] $ level).
As far as momentum and volume are concerned, notice that Willy, RSI, and the Stochastic are all moving to the upside with plenty of room to run, MACD is still hovering just above its zeroline, and PPO is back to flashing neutral signals, all of which are fairly bullish overall but do indicate the need for consolidation/exploration before [members-only content] $ is broken to the upside. This need for consolidation is being confirmed by the still relatively lackluster exchange volumes, the A/D line which remains generally under pressure, and the volume profile setup which still needs some filling in around current levels, although the large notch between [members-only content] $ is likely to tackled by the bulls if another higher low can be established on the next substantial pullback (which again we think it close at hand).
Things are finally getting interesting in the BTC markets following weeks of boring sideways, and thankfully the fireworks have been to the upside this time around which we haven't seen in quite some time. That said, the pace and magnitude of the move in conjunction with the overstretched technicals discussed above make us think that a selloff back to the downside is likely in the near future, although its one that we want to be buyers of in case this is the beginning of a larger breakout to the upside. While we remain somewhat skeptical of the breakout scenario this early in the process, we are less so than we have been recently due to the price action this week which is why we want to try to [members-only content] at higher levels than previously anticipated.