No surprises in the bitcoin markets over the past 24 hours considering price pushed up near the 5400 $ resistance level that we have been discussing over the course of this week, and as expected price has since retraced back below the psychologically significant 5000 $ level on increasingly worrisome technicals and overly bullish sentiment. Having said that, the bulls are defending VST support levels with vigor so far which is establishing a near-term trading range between [members-only text] $ that if broken will spark an extension in the chosen direction, likely either up to the [members-only text] $ area or down to our VST ProTrade entry area around [members-only text] $.
Today we'll zoom into the 4-hour chart to see what the current consolidation looks like from a shorter-term perspective, and for the time being the technicals look pretty dire considering SCMR has begun to print another [members-only text] bar on a bearish candle formation that is contributing to the deterioration of near-term market structure, all pointing to a break to the downside once a range resolution materializes. Also note that support is very thin below [members-only text] $ and the triangle breakout point will eventually need to be tested, again suggesting a bearish bias for now, although all of the moving averages continue to trend higher, strong dynamic support is still actively building below the market, and the Ichimoku Cloud remains bullish below the market, so we still want to buy the dip into the [members-only text]'s $.
Moving on to momentum and volume, notice that Willy, RSI, and the Stochastic have all fallen out of officially overbought territory but have a lot of room to run before being even partially recharged, MACD has broken below its zeroline and is picking up steam to the downside, and PPO continues to flash strong sell signals, all confirming that the market is likely to head lower in the near future. Additionally, bearish exchange volumes have increased substantially recently and volume profile is practically nonexistent until the [members-only text] $ level, also confirming the bearish outlook, but the A/D line still says buyers are active so we'll be ready when price hits our PT entry area.
Next we'll take one more look at the 3-day chart this week where we can see that price rallied right up to the bottom of the [members-only text] zone, the lower supply area, the bottom of the bearish Ichimoku Cloud, and the still falling 100 SMA yesterday before being rejected to the downside back below 5000 $ just before the candle close, and the new candle is coming in bearish so far, all of which points to more near-term downside. That said, SCMR is still printing [members-only text] signals while shorter-term market structure remains bullish, the EMA's are starting to stack to the upside, and strong dynamic support continues to actively build at the [members-only text] $ level, even more evidence that buying the dip in the [members-only text]'s $ is the play over the coming days.
As far as medium-term momentum and volume are concerned, notice that Willy and RSI never reached overbought territory but are starting to roll over, the Stochastic is still overbought and has yet to begin to retrace, MACD remains fairly healthy for the time being, and PPO is still flashing weak signals for now, all of which confirm near-term weakness but also the BTFD mentality. The still relatively strong exchange volumes and the healthy A/D line are also aligned with this outlook, as is the volume profile setup which is still very thin down to the ~[members-only text] $ region.
As the day progresses the market is getting heavier and heavier with more sellers emerging to take advantage of what are still elevated prices compared to where we've been used to over the past few months. We expect this trend to continue into the upcoming weekend with a breakdown below [members-only text] $ in the near future, and the technicals are confirming this, but we also think buyers emerge fairly quickly so we want to be ready to act near the top of the PT range in case they do indeed continue to play strong defense.