In classic bitcoin fashion, price broke above the ascending triangle pattern yesterday as expected on the way to new local and regional highs of 5466 $ before pulling back sharply in a bout of selling thus cementing the fakeout breakout, as well as the break of near-term market structure that accelerated the selling overnight. No doubt this does not bode all that well for the bulls as we approach the low liquidity weekend environment, however price action since the selloff has been relatively encouraging considering the bulls are legitimately trying to defend the psychologically significant 5000 $ level despite what are now very weak short-term technicals, so we still want to be small buyers of dips into key r/r areas if given the opportunity moving forward.
We'll take one final look at the 6-hour chart this week for a clean view of action from yesterday where we can see that price briefly spiked above the ascending triangle on a [members-only content] signal but the selloff shortly thereafter sparked a bearish doji candle that closed back inside the formation and was followed up by a [members-only content] signal on a bearish candle that spiked down out of the triangle before closing back within it. All of this was the precursor to the dramatic selloff overnight which sparked a [members-only content] signal that immediately broke down out of the triangle on the way to tagging the top of the [members-only content] zone where some support has emerged, although the new candle is also red and lackluster, near-term market structure has been broken, the EMA's have turned bearish, and new dynamic resistance has begun to build at [members-only content], so we expect more downside before the bulls truly return in earnest. That said, all of the longer-term SMA's continue to stack to the upside, much stronger dynamic support is still actively building below the market, and the Ichimoku Cloud continues to grow more bullish out in front of the market, so we'll keep the VST ProTrade (B) setup intact for the time being.
Moving on to shorter-term momentum and volume, notice that Willy and RSI are making good progress to the downside but still have quite aways to run before being fully recharged, the Stochastic is moving faster and is already getting close to oversold, MACD continues to move below its zeroline, and PPO is still flashing weak sell signals but is very close to returning to neutral, all confirming the near-term bearish outlook but also that buying the dip is still not a bad idea (given small sizing and generous r/r). Additionally, exchange volumes have certainly turned more bearish over the past 24 hours and the A/D line has rolled over a bit, again suggesting lower prices from current levels, and the volume profile setup remain porous between [members-only content] $, but it does look like buyers are staying fairly active for the time being which is encouraging moving forward.
The price action over the past 24 hours looks much more interesting on the 6-hour chart above than it does on the daily chart below considering that the triangle breakdown only served to push price back to the top of the upper demand area on a [members-only content] signal and still intact market structure, all of which suggests more rangy consolidation between ~[members-only content] $ over the coming days. So does the fact that the lower supply area has been reconfirmed on the bearish candle formation today but in the face of still rising medium-term SMA's, still active dynamic support dots, and a still bullish Ichimoku Cloud, so we'll try to be buyers of the bottom of the range and sellers of the top in case this persists for more than just a few days. In fact, if a legitimate range in this region can be established then the odds of this being a more substantial bullish flag formation increase which is another reason why we [members-only content] (albeit with still very small sizing).
As far as momentum and volume are concerned, notice that Willy and the Stochastic are just starting to roll over out of overbought territory but have hardly made any progress yet, RSI has made some progress to the downside but still has a ton of room to run lower before being even partially recharged, MACD is very close to crossing below its zeroline, and PPO continues to flash strong sell signals, all of which [members-only content]. Additionally, volume profile leaves something to be desired below the market and sell volumes have picked up a bit recently, however they remain bullish overall and the A/D line remains healthy and elevated, again confirming the forecast for more near-term downside but with a good possibility of a bounce from the [members-only content] $ area once price gets there.
There's not that much left to say that hasn't already been said, other than that we think the market is nearing a critical juncture in which either the bears return with a vengeance to test the [members-only content]'s $ (at the very least) where we could truly find out whether a higher low is in the cards, or the bulls take over completely and push price up to and perhaps past [members-only content] $ in a show of force at the end of this bear market. While we continue to think its more likely that price heads back down to lower levels before truly challenging the [members-only content] $ region, the way the bulls have been acting recently we cannot rule anything out at this point.