Bitcoin (BTC/USD) Price Update for February 14th, 2019

Market Commentary

For yet another day the bitcoin markets are consolidating with a slight downward bias just as the technicals have been telegraphing all week, and for the time being we still don't see any definitive indications one way or the other over the short-term which is why we are sticking with our forecast for more choppy action within the patterns that we have been discussing all week. We also have some additional formations to talk about on the 3-day chart when we get there that are muddying up the waters even more, therefore we have no problem sitting on the sidelines through the end of the week as we wait for a better entry to try to get long for a bounce to the top of the range. 

4-Hour Chart

We'll take one more close look at the short-term setup via the 4-hour chart where we can see that the bullish flag/descending channel remains firmly intact as price made new local lows over the past 24 hours, but is also still showing resilience following that weakness which has sparked a [members-only content] signal on the current candle formation which should help the bulls continue to play defense moving forward. Also note that the still rising 50 SMA just recently moved above the 200 SMA for a golden cross, the 100 SMA is slowly picking up steam to the upside, and the Ichimoku Cloud remains bullish out in front of the market, which should also be helpful for the bulls as the consolidation progresses. That said, the EMA's are accelerating to the downside, dynamic resistance continues to actively build around the [members-only content] $ level, and near-term market structure remains bearish, so we'll continue to wait for [members-only content] $ before buying the dip.

Moving on to momentum and volume, notice that Willy and the Stochastic are very close to oversold territory but are not fully recharge yet, RSI is finding support at its 40-line but remains in a downtrend overall, MACD remains stagnant just below its zeroline but is showing a small bullish divergence, and PPO has returned to neutral but has yet to flash any buy signals, all suggesting that more consolidation is likely over the near-term with a still intact bearish bias. The slightly bearish and dwindling exchange volumes as well as the porous volume profile setup both confirm this outlook, yet more reasons to stay neutral for now, although the A/D line is still quite strong so we're willing to buy near the top of the VST ProTrade entry area if given the opportunity. 

3-Day Chart

We'll zoom out to the 3-day chart again today for a broad view of the medium-term setup where we can see that there are a few different patterns overlapping each other right now that are making directionality difficult to decipher such as the descending channel which is currently intersecting with a slightly longer-term symmetrical triangle/bearish pennant while the potential Adam & Eve bottom remains intact and price is still in a support confluence consisting of the OTE long zone and multiple demand areas, all confirming our forecast for more consolidation in the [members-only content] $ area before a sustainable move away from this region. That said, the general bias does remain to the downside due to the still falling moving averages, the still active dynamic resistance overhead, and the still bearish Ichimoku Cloud above and out in front of the market, so we cannot rule out a test, or even break below, [members-only content] $ which is why caution is still warranted moving forward.

As far as momentum and volume are concerned, notice that Willy and RSI are still treading water just above oversold territory, the Stochastic continues its meager bounce but appears to be losing steam, MACD continues to hang just below its zeroline, and PPO is still flashing weak buy signals, none of which is directionally helpful over the short-term but does suggest [members-only content] is very close at hand. That said, exchange volumes continue to dwindle and are turning slightly more bearish, the A/D line remains under pressure for the time being, and the volume profile setup leaves something to be desired both above and below the market, so the bears are not out of ammo just yet which is why we continue to expect more weakness before a bottom is truly confirmed (or established).

Market Summary

With the market trapped in the 3500's $ with no clears signs of a breakout in either direction on the charts we continue to stay in capital preservation mode in order to save dry powder for lower levels when we get there. Granted, we would not be at all surprised to see one final spike up to the [members-only content] $ area on a breakout above the flag formation over the coming days, perhaps over the upcoming low liquidity holiday weekend, although we think this move will get quickly faded and eventually ends up in a selloff back below [members-only content] $ in order to retest support yet again to see if the bulls truly are intent on accumulating there.