While the bitcoin markets did manage to pop above the 12,000 $ level a few times over the past 24 hours, each time was quickly rejected back to the downside thus keeping the 11,000 - 12,000 $ trading range essentially intact as expected, and today price is selling off back down into the mid-11,000's $ on heavy short-term technicals and overly bullish sentiment which is even more evidence that the much-discussed consolidation remains fully intact as we approach the upcoming weekend. Having said that, the medium-term charts [members-only content] hence we continue to [members-only content] later this year.
We'll take one more look at the 6-hour chart this week for a view of the short-term setup where we can see that there appears to be a bit of a double top forming around the bottom of the [members-only content] zone and the pullback today has sparked a [members-only content] bar on a discouraging candle formation while VST and MT market structure both remain uncertain, all suggesting that the consolidation remains in effect but with a slight bearish bias over the near-term. The fact that the downtrend line failed to hold and the VP PoC has been broken to the downside also points to some weakness over the next day or two, however all of the moving averages continue to rise, strong dynamic support is still actively building around [members-only content] $, and the Ichimoku Cloud is very close to flipping to bullish out in front of the market, so we think the [members-only content] $ trading range is safe through the end of the week.
Moving on to momentum and volume, notice that Willy, RSI, and the Stochastic have all begun to move lower but still have work to do before being even partially recharged, MACD is starting to move further below its zero line, and PPO is still flashing sell signals, all confirming that the bears likely have the upper hand through the end of the workweek. That said, exchange volumes remain primarily bullish, the A/D line is still healthy, and the volume profile continues to fill in, so we think the bulls are ready to buy the dip should it come over the next few days.
Next up is the daily chart where we can see that price is trying to close above the descending channel for the second day in a row as a small bullish pennant appears to be forming on [members-only content] signals and still favorable short-term market structure, all of which is fairly good news for the bulls moving forward. The still-rising moving averages, active dynamic support dots, and firmly bullish Ichimoku Cloud all confirm the medium-term upward bias, although its clear that heavy OTE and supply area resistance overhead will continue to be an impediment to substantially higher prices over the shorter-term thus confirming our forecast for more consolidation within the channel before [members-only content] materializes.
As far as medium-term momentum and volume are concerned, notice that Willy and RSI are pausing below overbought territory with the potential for some recharging over the next couple of days while MACD remains healthy overall, good news for the bulls, however the Stochastic has already topped out and PPO is now neutral which will likely put a damper on bullish enthusiasm at least until the weekend. The still thin and porous volume profile setup is also a bit of a worry, although exchange volumes remain bullish and the A/D line continues to move higher so we still think that the longer-term bias is to the upside moving forward.
Given the developments in the bitcoin markets this week, its clear to us that the technicals continue to be the driving force behind price action despite brief macro-driven bouts of volatility that we expect to continue for the foreseeable future now that China appears to be in a devaluing regime once again. Regardless, said technicals continue to point to [members-only content] before seeing any sustainable movement in either direction hence we're staying neutral unless we get a chance at the VST ProTrade setup over the next 24 hours.