Bitcoin Trading Update for February 21st, 2019

Market Commentary

The stalemate in the bitcoin market continues around the 3900 $ level as indecision has gripped both bulls and bears resulting in choppy trendless price action that could easily continue through the end of the work week. If, however, a move away from this region does materialize over the next few days we are starting to think it will be to the downside due to some worrying short-term technical indications, as well as the recent failure to get back above 4000 $, which is why we are staying patient for lower levels before getting active in the market once again. That said, if the bulls are able to keep the current bull flag that is forming intact over the course of the weekend then they will likely be back in the driver's seat next week, although for now we think [members-only content]. 

4-Hour Chart

First of all we want to check in on the 4-hour chart for a close view of the short-term setup before zooming out tomorrow, and we can see that price did spike back up near the 4000 $ level over the past 24 hours but was quickly rejected back to the downside by the bears which sparked a bearish candle formation thus putting an end to the[members-only content] signals that had been painting, and now those signals are [members-only content] and market structure is turning heavy so the bears appear to be stirring once again. Also note that short-term support is quite thin down to the [members-only content] $ area so if price breaks below [members-only content] $ then additional downside is likely, however we still want to be buyers of a more substantial dip due to the still rising moving averages, the still active dynamic support dots, and the firmly bullish Ichimoku Cloud so the ProTrade ideas are staying intact until further notice. 

Moving on to momentum and volume, notice that Willy remains pinned in overbought territory, MACD is moving further below its zeroline, and PPO continues to flash sell signals, all pointing to [members-only content], although RSI and the Stochastic are in the process of recharging so perhaps the bulls will return sooner than expected. Also note how strong the A/D line remains which is good for the bulls moving forward, although exchange volumes are currently mixed and the volume profile setup needs a lot of attention around [members-only content] $ and between [members-only content] $ which adds to the bear case over the near-term. 

Daily Chart

We'll revisit the daily chart one more time this week where we can see that price continues to struggle with the lower [members-only content] zone despite [members-only content] signals which is keeping candle formations bearish and market structure uncertain, all of which suggests more sideways action over the short-term. So do the rising EMA's and 50 SMA, as well as the active dynamic support dots, which should help the bulls play defense on weakness, and the upper OTE short zone, lower supply area, and bearish Ichimoku Cloud which should all help to keep the bears active as well moving forward. That said, given current price action and the shorter-term technicals discussed above we are currently leaning [members-only content] until further notice. 

As far as momentum and volume are concerned, notice that Willy and RSI still have a little bit of room to run higher before being officially overbought and MACD is still moving slowly above its zeroline, all good signs for the bulls heading into the weekend, although the Stochastic is definitively overbought and PPO has started flashing strong sell signals so even though another [members-only content] is possible we think [members-only content] in the very near future. The A/D line is confirming this outlook given it remains under pressure overall, although exchange volumes are still fairly encouraging and the volume isn't that bad other than around [members-only content] $ so we still want to buy the dip if given the opportunity.

Market Summary

Given that the market is currently consolidating inside of a near-term bullish flag formation, we would not be surprised to see [members-only content] in order to access liquidity for a more substantial retracement heading into next week. This fits with what we are seeing in terms of sentiment, as well as price action, which implies quite the treacherous trading environment over the next few days hence on the sidelines we'll stay until a more definitive move away from this area materializes.