Its been a pretty wild 24 hours in the bitcoin markets as price spiked above the 12,000 $ level overnight only to be quickly rejected back to the downside in short order which has turned the technicals a bit more uncertain heading into the middle of the week despite a still favorable outlook overall. Not only has it been a crazy week already in crypto, but the legacy financial markets have been on a rollercoaster ride as well due to uncertainty surrounding the US/China trade deal, which is likely adding to the gyrations in bitcoin, hence we want to stay neutral until we see how the daily candle closes today and/or we get more clarity as to the macro situation.
We'll begin by zooming into the 4-hour chart for a close look at the short-term setup where we can see that consolidation indeed took place in the lower supply area for most of the day yesterday as expected, but it was broken to the upside by a large [members-only content] signal that tagged the top of the OTE short zone before sellers moved in to push price back into the supply area where the market is once again consolidating in rather bullish fashion. The [members-only content] signals, still intact market structure, rising moving averages, active dynamic support dots, and increasingly bullish Ichimoku Cloud also suggest that the bullish bias remains intact overall, however still strong resistance in this area and a lack of historical near-term support until the [members-only content] $ region are keeping us patient yet ready to pounce on a move back down to that level.
The fact that Willy, RSI, and the Stochastic are all just now coming out of overbought territory with plenty of room to run to the downside before being recharged while MACD gets ready to cross below its zeroline and PPO flashes strong sell signals also confirm the need for more consolidation over the next few days perhaps with a VST bias down to the [members-only content] $ area. The increase in bearish exchange volumes over the past 12 hours and the still somewhat porous volume profile setup down around the [members-only content]'s $ also support the idea of a pause/retrace, although the A/D line remains strong so we'll stay in BTFD mode until further notice.
We'll stay focused on the daily chart today as it remains the most informative medium-term view of the market, and we can see that price spiked above the downtrend line last night but was quickly pushed back below it thus sparking a [members-only content] today on a bearish doji candle that could signal a new lower high thus confirming still bearish shorter-term market structure, all fairly worrisome for the bulls moving forward. Having said that, all of the moving averages are trending higher again, new and quite strong dynamic support continues to build just below [members-only content] $, and the Ichimoku Cloud is still firmly bullish, so we think the bulls are still in control from a longer-term perspective even if price moves back below [members-only content] $ before tackling the [members-only content]+ $ region.
As far as momentum and volume are concerned, notice that the Stochastic is now pinned in overbought territory which points to more choppy consolidation over the coming days, although Willy and RSI still have room to run to the upside, MACD has yet to roll over, and PPO is still flashing buy signals despite the recent rally, so we think dips will continue to be bought and [members-only content] are likely after the market cools off a bit. The still primarily bullish exchange volumes and healthy A/D line confirm this outlook, however the thin volume profile setup remains a worry overall so we'll need to keep an eye on it if things truly begin to deteriorate.
With the market hovering around the 11,700 $ level on fairly benign price action and mixed short-term technicals we think the path of least resistance over the next few days is sideways between ~[members-only content] $, much like our forecast from yesterday. That being the case, we also can't rule out another macro-driven bout of volatility either to the upside or downside so we want to stay fairly cautious with ProTrade sizing until we get more clarity as to whether or not the bull market is starting up once again (which if [members-only content] $ can hold through the end of the week is a pretty good bet in our opinion).