The bitcoin markets have moved slightly lower over the past 24 hours to test the 3500 $ area and so far the bulls have been able to play defense which is keeping the likelihood of a continuation of the current consolidation between [members-only content] $ high through the end of the work week as expected. In fact, it's looking like the market wants to stay in this range over the course of the weekend as well given the current technical setup which is why we are staying on the sidelines until further notice, however we don't think this stagnation is likely to persist into the month of February so we are expecting volatility to begin to pick up again next week.
First up is the 6-hour chart where we can see that the move down to the new 3518 $ local low sparked a rare [members-only content] signal immediately thereafter but this retracement was quickly rejected back to the upside by the top of the upper demand area and the OTE long zone thus [members-only content] on a bullish candle formation which bodes well for the bulls moving forward. Having said that, we don't expect any substantial or sustainable rallies in the near future due to the still falling moving averages, still broken market structure, and still downwardly expanding Ichimoku Cloud so the [members-only content] $ range appears safe for the time being.
Moving on to momentum and volume, notice that Willy and RSI have flatlined in no man's land but do still have some room to run higher and MACD is close to getting back above its zeroline, all good for the bulls, however the Stochastic is rising closer to overbought territory despite little movement in price and PPO is still [members-only content] which suggests more recharging/consolidation is likely before a resolution out of this region. Exchange volumes are supportive of this outlook given they remain mixed and continue to dwindle, as is the volume profile setup which is still quite ugly both above and below the market (mainly below), although the A/D line is holding up well which means buyers are somewhat active for now despite what we still think is a slight bearish bias moving forward.
We'll take one more look at the daily chart this week before zooming out to the weekly tomorrow, and we can see that ever since the symmetrical triangle pattern was broken the market has appeared to trade within a descending channel on broken and heavy market structure and a hodgepodge of mixed candle signals, all of which confirms the bearish bias we just mentioned, although the longer-term demand area and OTE long zone are still providing support on weakness while a [members-only content] signal remains in play so the door is certainly still open for a [members-only content]. That said, there is a lot of wood for the bulls to chop still considering that all of the moving averages continue to fall, strong dynamic resistance is still actively building overhead, and the Ichimoku Cloud continues to expand to the downside out in front of the market, so despite the possibility of [members-only content] we still think a move down to that region is likely before the bulls return in earnest.
As far as momentum and volume are concerned, notice that Willy has yet to cross over into officially oversold territory, RSI continues to tread water in no man's land, the Stochastic is fully recharged but remains pinned at very low levels, MACD remains stagnant around its zeroline, and PPO is still flashing weak buy signals but has yet flip to bright green, all of which point to more [members-only content] over the short-term. So do exchange volume which remain mixed and continue to drop, the A/D line which remains under pressure, and the volume profile setup which is still suboptimal both above and below the market, so we'll stay neutral and patient until more definitive directional signals emerge on a resolution away from the [members-only content] $ trading range (which, again, we are not expecting until next week).
As long as the bitcoin markets remain in a sideways consolidation while newsflow remains slow and the fundamentals remain stagnant there won't be much for us as traders to do other than try to buy the dips and sell the rips inside of the [members-only content] $ range until it breaks. While we are not issuing any official ProTrade ideas that take advantage of this strategy due to relatively poor r/r profiles, more nimble scalpers can try to play the range in order to generate alpha while the market is doing nothing but chopping up less experienced traders.