Nov 18, 2019 --- Blog
Below is our latest Bitcoin forecast from 25tth September 2019 where we take a look at the latest Bitcoin market performance and provide our commentary on its state. Take a look below!
It didn't take long for the bitcoin bears to take advantage of the deteriorating market conditions yesterday considering price started to fall not long after our update was issued which took out the 9049 $ regional low, along with the descending triangle, thus sparking a rapid selloff that crescendoed below the 8000 $ level before rebounding back into the low 8000's $ where the market continues to consolidate this morning. No doubt this is a huge blow to the bulls both in terms of the technicals as well as market sentiment, so we're not expecting a "V" reversal out of this area heading into the back half of the week, and in fact we can't rule out even more downside over the coming days, however we do think we're getting closer to a longer-term buying opportunity so we'll stay ready to buy in the 7000's $ in case another leg down develops.
We'll zoom back out to the 6-hour chart for a view of damage that has been done to the short-term setup, and we can see that the bearish signs that we discussed yesterday quickly led to a sharp downdraft on red SCMR signals and large bearish candle formations that broke short-term market structure and sparked new dynamic resistance overhead, not good news for the bulls moving forward. The falling moving averages, multiple levels of even stronger dynamic resistance overhead, and the increasingly bearish Ichimoku Cloud also suggest that the bears are in control, although the top of the longer-term demand area has acted as support so far which is one reason why we think that a legitimate bottom is nearing (although likely not in yet).
Moving on to momentum and volume, notice that Willy, RSI, and the Stochastic are all fully recharged now and PPO is flashing strong buy signals for the first time since mid-August, fairly encouraging signs for the bulls, however, MACD remains weak so we'll stay cautious until further notice. The large spike in sell volumes, the broken A/D line, and the very thin volume profile setup are confirming that caution is necessary, hence we're not trying to get long in the 8000's $, at least not until some legitimate signs of reversal materialize.
We'll also revisit the daily chart today where we can see that the breakdown below the bottom of the descending triangle yesterday sparked a huge selloff on a large red SCMR signal and bearish candle formation that broke short to medium-term market structure, none of which bodes well for the bulls moving forward. Neither do the now falling shorter-term moving averages, the multiple levels of dynamic resistance overhead, or the bearish Ichimoku Cloud out in front of the market, although the 200 SMA and top of the upper demand area are acting as support right now and if they can continue to do so through the end of the month then the bulls could get back in the game when October starts.
As far as medium-term momentum and volume are concerned, notice that RSI and the Stochastic are just now flirting with oversold territory while PPO continues to flash buy signals, decent signs for the bulls, however MACD is quickly weakening and Willy still has room to run to the downside so we need to wait and see if the 7998 $ local and regional lows can hold on a retest or not before considering getting active. The spike in bearish exchange volumes, the downtick in the A/D line, and the still suboptimal volume profile setup all confirm that lower prices from this 8400 $ area are likely whether or not the retest holds, hence no additions to the ProTrades despite the possibility of a sustainable bottom in the low-8000's $ (although its still far too early to discuss this any further).
While its entirely possible that the bitcoin markets take a breather from the recent volatility over the next few days given the pace and magnitude of the selloff yesterday, we don't think that the bears are done with this market yet due to the broken technicals, the bearish market sentiment, the lack of news flow, and the neutral seasonality so we see no reason to get impatient before seeing some signs of a reversal on the charts.
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