The bitcoin markets have held up surprisingly well over the past 24 hours following the spike higher yesterday in the face of still bearish technicals and still anemic network fundamentals, however this could be due in part to the rumors swirling around that Russia is considering buying $10 billion worth of BTC in order to get around US sanctions, which we think is unlikely and will fade from the market's mind soon enough (but is helping right now). Once it does, and the attention refocuses on where we are in the cycle and what the charts look like, we think the bears will be back in control and the bulls will be back on defense as the battle over the cycle bottom kicks into full swing before the end of the month.
We'll begin by zooming out to the 12-hour chart for a broader view of the short-term setup where we can see that the bounce off of the top of the [members-only content] zone yesterday that sparked the [members-only content] signal has slowly been faded since the 3714 $ local top which has turned [members-only content] for now and shifted candle formations to bearish which is keeping market structure broken and heavy, none of which bodes well for the bulls moving forward. Neither do the short-term moving averages which are still acting as resistance, the 50 or 100 SMA's both of which are bearish and reside below [members-only content]$, the 200 SMA which is still in a steady downtrend, the strong [members-only content] that continue to build overhead, or the Ichimoku Cloud which remains firmly bearish out in front of the market, all suggesting that lower prices are likely in the near future. Granted, we have seen some support emerge recently in the adjusted upper demand area and around the OTE long zone so we still want to be buyers of lower levels due to favorable r/r shooting against the [members-only content] low, but if those lows break then [members-only content] $ is inevitable.
Moving on to momentum and volume, notice that Willy is getting very close to fully recharged, RSI still has a bit of room to run lower before being recharged, the Stochastic is already starting to move out of oversold territory, MACD is flashing a small bullish divergence and is close to crossing above its zeroline, and PPO has begun to flash [members-only content] signals, which is certainly a step in the right direction, however all of these leave room for another leg lower before a more legitimate bottom materializes. This is being confirmed by the still slightly bearish but very anemic exchange volumes and the falling A/D line both of which suggest that sellers are more active than buyers for the time being, and the volume profile setup still needs some attention between [members-only content] $ which is right in the heart of our VST ProTrade entry area.
We'll also zoom out to the 3-day chart today for some longer-term context to the action so far this week where we can see that the spike higher yesterday is barely noticeable next to the relatively large [members-only content] signal that printed late last week but has served to turn the current candle formation quite bearish while at the same time market structure has taken a turn for the worse despite already being broken, all pointing to [members-only content] at some point in the not too distant future. Also note that price has moved back below the still slightly bearish EMA's, the 50 and 100 SMA's both remain in steady downtrends, very strong dynamic resistance continues to actively build around [members-only content] $, and the Ichimoku Cloud remains firmly bearish out in front of the market, thus confirming that the path of least resistance is currently still to the downside despite the action earlier this week. Having said that, the fact that the long-term demand area, the short-term demand area, and the OTE long zone all overlap in the [members-only content] $ region reinforces our call to get long there for at least a significant countertrend bounce.
As far as momentum and volume are concerned, notice that Willy remains pinned in oversold territory, RSI is treading water but is still recharging overall, and MACD remains above its zeroline for now, all good signs for the bulls moving forward, however the Stochastic has rolled over with plenty of room to run to the downside and PPO has shifted back to weak buy signals as opposed to strong ones which we think indicates the need for [members-only content] before the bulls return in earnest. Additionally, exchange volumes continue to drop while the A/D line slowly bleeds lower, neither of which signal a bottom yet, and volume profile still leaves much to be desired overall so we remain skeptical of spikey moves like we saw yesterday that are unsupported by convincing volumes.
Given where we are in terms of the technicals, fundamentals, and seasonality we don't have all that much left to say that hasn't already been said in the previous analyses so we simply sum up the forecast heading into the middle of a highly uncertain week: it appears as though the market may want to continue to consolidate between [members-only content] $ for another day or two before testing lower levels in the [members-only content] $ region where we will be ready and waiting to pounce on the opportunity to try to buy a higher low or double bottom. This may or may not be where the selloff terminates, but in terms of a trade setup it doesn't get much better than this. From a longer-term perspective, there is no way to call a bottom until we see something like this play out which is why we are staying LT neutral until further notice.