Apr 16, 2019 --- Blog
The bitcoin markets are right back where they have been for the past several days, hovering just above the 5000 $ level on mixed technicals following a brief dip back down into the mid-4900's $ yesterday afternoon that was quickly rejected back to the upside like the others before it. There's no doubt that this price action remains encouraging for the bulls considering the charts are still suggesting that there is increasing potential for near-term weakness, which we will discuss in depth below. While we continue to expect at least a test of the [members-only content] $ area before the bulls truly get active again, we must admit that the longer the bulls defend 5k $ the better the odds are becoming of another legitimate leg to the upside.
We'll zoom out to the 6-hour chart today for a slightly broader view of the short-term setup where we can see that price moved down into the [members-only content] zone for the third time yesterday on a [members-only content] signal which was once again rejected back to the upside thus sparking a [members-only content] signal on a bullish candle formation earlier today, all of which is fairly good news for the bulls as the week progresses. Also note that the 50 SMA is still rising and is acting as near-term support, the 100 and 200 SMA's both remain in steady uptrends, and the Ichimoku Cloud is still firmly bullish out in front of the market, again encouraging signs for the bulls, although the EMA's are slowly falling and are acting as overhead resistance while market structure remains heavy from a near-term perspective so we cannot rule [members-only content] over the course of this week.
Moving on to momentum and volume, notice that Willy, RSI, and the Stochastic are all treading water in no man's land while MACD stagnates just below its zeroline and PPO continues to flash neutral signals, all suggesting more consolidation between ~[members-only content] $ until further notice. That said, dwindling sell volumes and a rising A/D line within what could be a longer-term bull flag are telling us that there is still a slight bullish bias overall, although volume profile remains a disaster between [members-only content] $ which is an area that we still think will be tested eventually.
We'll also zoom out to the 3-day chart today for a view of the medium to long-term technicals where we can see that price continues to struggle with the lower supply area and the falling 100 SMA which is sparking fairly bearish candle formations and turning shorter-term market structure quite heavy, not great for the bulls over the coming days, however [members-only content] within a consolidation near regional highs while moving into the bearish Ichimoku Cloud which should help the bulls' psyche moving forward. Also note that the EMA's continue to rise and strong dynamic support continues to build below the market while no dynamic resistance is in sight, also good signs for the bulls, however the long-term trend remains down so caution is still warranted moving forward.
As far as momentum and volume are concerned, notice that Willy is very close to entering overbought territory, as is RSI, the Stochastic remains pinned in overbought territory, MACD has rolled over, and PPO continues to flash weak sell signals, all pointing to the need for a recharge but also keeping the medium-term outlook fairly bullish ([members-only content]). Additionally, exchange volumes are still favoring the bulls and the A/D line remains reasonably healthy, although the volume profile setup remains the fly in the ointment regardless of timeframe which certainly continues to bear watching moving forward.
While the charts don't look all that bad considering the lack of a true retracement since this rally above 5k $ began, in addition to the amount of effort its currently taking the bulls to keep price above that level, they also don't look all that great either especially from a longer-term perspective which is why we are still not interested in getting active on the long side at these levels. In fact, we think staying on the sidelines and preserving capital remains the play for the time being given the shorter-term technicals are suggesting even more rangy consolidation between [members-only content] $ is likely at least over the next 24 hours.
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