"Resilient" is probably the best way to describe the bitcoin markets this morning considering we saw heavy price action and suboptimal technicals yesterday fail to produce new lows below 3658 $ which led to a rounded bottom and the possibility of another shorter-term Adam & Eve reversal which we'll discuss in more detail below. There are also some other encouraging patterns coming into play on multiple timeframes that bode well for the bulls moving forward, although we must keep in mind that a cycle low has yet to be confirmed so we need to stay conservative regardless of how good the charts look over the near-term.
With the market rallying back well above the 3800 $ level today we want to zoom into the 4-hour chart for a closer look at recent developments such as the aforementioned Adam & Eve bottom in the mid-3600's $ that will be confirmed on a break above [members-only content] which is currently in reach for the bulls. Also note that a [members-only content] signal printed right in the middle of the [members-only content] zone and upper demand area yesterday which was followed up by a [members-only content] that led to the large [members-only content] signal we are seeing materialize today on a very bullish candle formation that is helping market structure improve, all while new dynamic support begins to build around the [members-only content] $ level, again good news for the bulls moving forward. Granted, the shorter-term moving averages are mixed and the 100 SMA is currently acting as resistance, as are the bearish Ichimoku Cloud and the lower supply area, however if this resistance patch is taken out then there is clear sailing up to the [members-only content] zone around [members-only content] $.
As far as short-term momentum and volume are concerned, notice that Willy, RSI, and the Stochastic are all accelerating to the upside following full recharges recently, MACD just crossed back above its zeroline, and PPO is still flashing strong buy signals, all of which point to more upside over the near-term (at least up to test the [members-only content] $ level). Additionally, exchange volumes are turning more bullish and the A/D line remains surprisingly strong, both supportive of another leg higher, although the volume profile setup indicates that much more exploration is needed between [members-only content] $ before a sustainable move away from this area which is why we think we'll get another chance to enter the VST ProTrade before that happens.
Next we'll look at the 3-day chart for a broad view of the medium-term setup where we can see that price is still finding support at the top of the longer-term demand area which is keeping [members-only content] and candle formations somewhat bullish while market structure continues to slowly improve, all decent signs for the bulls moving forward, as is the still intact Adam & Eve bottom as well as the possible Cup & Handle continuation that portends an extension up into the [members-only content] $ area in the not too distant future. Having said that, the market continues to struggle with the flatlined EMA's, the 50 and 100 SMA remain in steady downtrends, the 200 SMA continues to decelerate, longer-term market structure remains bearish overall, and the Ichimoku Cloud is still moving to the downside out in front of the market, so the burden of proof continues to be on the bulls despite any near-term strength.
Moving on to momentum and volume, notice that Willy and RSI are still treading water in no man's land, the Stochastic has rolled over to the downside with room to run, MACD continues to stagnate around its zeroline, and PPO continues to flash neutral signals, all of which suggest that more consolidation is likely in the [members-only content] $ range before a resolution away from this area materializes in either direction. The volume indications are confirming this outlook considering exchange volumes remain mixed and anemic and the A/D line continues to drift sideways, however the volume profile setup is now much thinner above the market than below it so the bulls could gain a slight medium-term advantage if they can [members-only content] through the end of the month.
As we continue to see green shoots emerge on the charts we continue to get increasingly more sanguine regarding the potential for a sustainable cycle low at 3122 $ despite the similarities to the previous extended consolidation in the 6000's $, which is actually looking less similar in terms of price action as time passes. Having said that, we must continue to reiterate the possibility that the bear market is not yet over and all of this positive action is simply a bull trap before sub-3000 $ prices so we'll stay skeptical and conservative until the cycle truly turns via a confirmation of the lows on a retest or breakout.