The bitcoin markets probed just below the 3800 $ level again over the past 24 hours but were quickly rejected back to the upside by a new demand area which tells us that price is likely to continue to recharge via a choppy sideways consolidation rather than a selloff back down into the [members-only content] $ area as previously expected, at least over the near-term. This means that there is still a decent shot at a rally up to the [members-only content] $ resistance zone before the bears truly return in earnest, although the similarities between the current period of indecision and others in the recent past remains cause for concern moving forward, particularly over the next few weeks, which is why we'll stay conservative even if we get a shot at the VST ProTrade.
We'll begin with a look at 4-hour chart for a more granular view of the short-term setup where we can see that the retracement yesterday pushed price down to the new upper demand area on [members-only content] signals and bearish candle formations, although said demand area was able to act as support on closes which sparked a [members-only content] bar that was followed up by a [members-only content] signal overnight, all of which is keeping market structure bullish and keeping the bears at bay for now. Also note that price is back above all of the short-term moving averages and the 50 and 200 SMA's remain in steady uptrends, both good for the bulls moving forward, however the 100 SMA is still falling and the Ichimoku Cloud remains bearish around and out in front of the market so we think the bears are likely to defend the [members-only content] $ resistance patch which means the rangy consolidation between the upper demand area and lower supply area is likely to continue for the better part of this week.
Moving on to momentum and volume, Notice that Willy and RSI have bounced recently but have yet to fully recharge, which also suggest more consolidation over the coming days, although the Stochastic is starting to pick up steam out of oversold territory, MACD is getting close to crossing back above its zeroline, and PPO is flashing weak buy signals again, so there could be [members-only content] once again. Additionally, exchange volumes are already shifting back to bullish for the time being and the A/D line remains strong despite the selling yesterday, which are supportive of [members-only content], however the volume profile setup is very thin below [members-only content] $ and above [members-only content] $ so we think price stays within this range for at least the next few days.
Next we'll zoom out to the 3-day chart to give some longer-term context to the current stagnation, and we can see that both the Adam & Eve bottom and Cup & Handle continuation remain intact within what appears to be a large, extended ascending triangle which [members-only content]. That said, the 50 and 100 SMA's both continue to trend lower, the 200 SMA has officially flatlined overhead, medium-term market structure remains bearish, and the Ichimoku Cloud is still moving to the downside out in front of the market, so despite the potentially bullish medium-term formations mentioned above the bears still have a slight edge in terms of the longer-term technicals. This combination of bullish patterns and bearish trend indicators is a recipe for more consolidation which is why we think [members-only content] for awhile longer even if it ends up resolving to the downside eventually.
As far as momentum and volume are concerned, notice that Willy, RSI, and the Stochastic have all pulled back a bit recently but are still in uptrends with room to run, MACD continues to hover just above its zeroline, and PPO is still flashing neutral signals but is getting very close to overbought, all suggesting that there could easily be [members-only content] before the bears start to get active once again. Also note that exchange volumes are still somewhat bullish, the A/D line is slowly moving higher for now, and the volume profile setup remains much thinner above the market than below it, also good for the bulls over the coming days, however the dwindling volumes in conjunction with a still-depressed A/D line overall confirm that the market is not ready to move away from the current consolidation triangle hence [members-only content] until further notice.
While it may be tempting to try to scalp this market within the current short-term trading range, which is between [members-only content] $, the random nature of recent movements makes us think that [members-only content] is the proper play until we get more clarity regarding medium-term directionality via either a breakout above [members-only content] $ or a breakdown below [members-only content] $. Until then, our setups will stay conservative and sizing will remain small.